{"id":41180,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/note-purchase-agreement-mortgage-com-inc-and-intuit-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"note-purchase-agreement-mortgage-com-inc-and-intuit-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/note-purchase-agreement-mortgage-com-inc-and-intuit-inc.html","title":{"rendered":"Note Purchase Agreement &#8211; Mortgage.com Inc. and Intuit Inc."},"content":{"rendered":"<pre>\n                      $27,500,000 NOTE PURCHASE AGREEMENT\n\n\n                            dated as of May 5, 1999\n\n                                    between\n\n                               MORTGAGE.COM, INC.\n\n                                and INTUIT INC.\n\n\n\n\n                               TABLE OF CONTENTS\n                               -----------------\n\n\n1.   PURCHASE, SALE AND TERMS OF NOTE........................................  1\n     1.01.     Authorization of Notes........................................  1\n     1.02.     The Shares....................................................  1\n     1.03.     Purchase Price and Closing....................................  1\n\n\n2.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................  2\n     2.01.     Organization, Standing and Power..............................  2\n     2.02.     Authority; Enforceability No Conflict.........................  2\n     2.03.     Capitalization................................................  3\n     2.04.     Subsidiaries..................................................  6\n     2.05.     Status of Note and Shares.....................................  6\n     2.06.     Financial Statements..........................................  6\n     2.07.     Actions Pending...............................................  6\n     2.08.     Compliance with Law...........................................  7\n     2.09.     No Material Adverse Change....................................  7\n     2.10.     Certain Fees..................................................  7\n     2.11.     Disclosure....................................................  7\n     2.12.     Securities Act of 1933........................................  8\n     2.13.     Governmental Approvals........................................  8\n     2.14.     Unites States Real Property Holding Corporation...............  8\n     2.15.     Representations Under Series B Purchase Agreeement............  8\n     2.16.     Year 2000 Compliances.........................................  8\n     2.17.     Patents and Other Proprietary Rights..........................  9\n     2.18.     No Conflict of Interest....................................... 10\n     2.19.     Merger or Sale................................................ 10\n     2.20.     Disclosure.................................................... 10\n     2.21.     Tax Returns and Payments...................................... 11\n     2.22.     Labor Agreements and Actions.................................. 11\n\n3.   REPRESENTATIONS AND WARRANTIES OF THE PURCHASER......................... 11\n     3.01.     Organization and Standing of the Purchaser.................... 11\n     3.02.     Authority; Enforceability; No Conflict........................ 11\n     3.03.     Acquisition for Investment.................................... 12\n     3.04.     Financing..................................................... 12\n\n4.   CONDITIONS TO PURCHASER'S OBLIGATIONS FOR CLOSING....................... 12\n     4.01.     Representations and Warranties................................ 13\n     4.02.     Secretary's Certificate....................................... 13\n     4.03.     Officer's Certificate......................................... 13\n\n\n\n     4.04.     Series E Preferred Stock...................................... 13\n     4.05.     Consents, Licenses, Approvals, etc............................ 13\n     4.06.     Good Standing Certifcates..................................... 13\n     4.07.     No Proceedings or Litigation.................................. 14\n     4.08.     [Intentionally Omitted]....................................... 14\n     4.09.     Legal Opinions................................................ 14\n     4.10.     Consents and Waivers of Equity Holders........................ 14\n     4.11.     Other Consents................................................ 14\n     4.12.     Expenses...................................................... 14\n     4.13.     Compliance with this Agreement................................ 14\n     4.14.     Proceedings Satisfactory...................................... 14\n     4.15.     Proxy......................................................... 15\n\n5.   COVENANTS OF THE COMPANY\n     5.01.     Covenants of the Company Under the Series B Purchase \n               Agreement..................................................... 15\n     5.02      Future Senior Subordinated Obligations........................ 15\n     5.03.     Issuance of Equity Securities................................. 15\n\n6.   REGISTRATION, TRANSFER AND SUBSTITUTION OF NOTE......................... 16\n     6.01.     Note Register; Ownership of Notes............................. 16\n     6.02.     Transfer and Exchange of the Note............................. 16\n     6.03.     Replacement of Notes.......................................... 16\n\n7.   PAYMENTS ON NOTES; REDEMPTION; CONVERSION............................... 16\n     7.01.     Place of Payment.............................................. 16\n     7.02.     [Intentionally Omitted]....................................... 16\n     7.03.     Mandatory Redemption.......................................... 16\n     7.04.     Optional Redemption........................................... 17\n     7.05.     [Intentionally Omitted]....................................... 17\n     7.06.     Maturity; Surrender; etc...................................... 17\n     7.07.     Conversion Privilege.......................................... 17\n\n8.   SUBORDINATION OF SENIOR SUBORDINATED OBLIGATIONS........................ 18\n     8.01.     Generally..................................................... 18\n     8.02.     Restrictions.................................................. 18\n     8.03.     Permitted Payments............................................ 18\n     8.04.     Turnover of Payments.......................................... 19\n     8.05.     Insolvency, etc............................................... 19\n     8.06.     Obligations Not Impaired...................................... 19\n     8.07.     Payment of Senior Deby; Subrogation........................... 19\n\n\n                                       ii\n\n\n9.   EVENTS OF DEFAULT AND ACCELERATION...................................... 20\n \n10.  REMEDIES ON DEFAULT, ETC................................................ 21\n     10.01.    Remedies...................................................... 21\n     10.02.    Annulment of Defaults......................................... 21\n     10.03.    Waivers....................................................... 22\n\n11.  DEFINITIONS AND ACCOUNTING TERMS........................................ 22\n     11.01.    Certain Defined Terms......................................... 22\n     11.02.    Accounting Terms.............................................. 27\n\n12.  INDEMNIFICATION......................................................... 27\n     12.01.    General Indemnity............................................. 27\n     12.02.    Indemnification Procedures.................................... 27\n\n13.  MISCELLANEOUS........................................................... 29\n     13.01.    No Waiver; Cumulative Remedies................................ 29\n     13.02.    Amendment, Waivers and Consents............................... 29\n     13.03.    Addresses for Notices......................................... 29\n     13.04     Costs, Expenses and Taxes..................................... 30\n     13.05     Binding Effect ; Assignment................................... 30\n     13.06.    Survival of Representations and Warranties.................... 30\n     13.07.    Prior Agreements.............................................. 31\n     13.08.    Severability.................................................. 31\n     13.09.    Confidentiality............................................... 31\n     13.10.    Governing Law................................................. 31\n     13.11.    Headings...................................................... 31\n     13.12.    Counterparts.................................................. 31\n     13.13.    Further Assurances............................................ 32\n     13.14.    Waiver........................................................ 32\n     13.15.    Specific Enforcement.......................................... 32\n\n\n                                      iii\n\n\n\n\n                       $27,500,000 NOTE PURCHASE AGREEMENT\n\n\n                                                        Dated as of May 5, 1999.\n\nIntuit Inc.\n\nLadies and Gentlemen : \n\n         MORTGAGE.COM, INC., a Florida corporation (the \"company\"), hereby agrees\nwith Intuit Inc. as follows :\n\n1.       PURCHASE, SALE AND TERMS OF NOTE\n\n         1.01. Authorization of Note. The Company has authorized the issuance\nand sale of a $27,500,000, 12% Seniuor Subordinated Convertible Note (the\n\"Note\") due May 5, 2001 (the \"Final Maturity Date\"), to be substantially in the\nform of Exhibit A and to be convertible into shares of Series E Preferred Stock\nor Common Stock as provided in Section 7.07.\n\n         1.02. The Shares. The Company has authorized and has reserved and\ncovenants to continue to reserve, free of preemtive rights and other similar\ncontractual rights of stockholders, (a) a sufficient number of authorized but\nunissued shares of Series E Preferred Stock (the \"Preferred Shares\") to satisfy\nthe rights of conversion of the Note, and (b) a sufficient number of authorized\nbut unissued shares of Common Stock (the \"Common Shares\") to satisfy the rights\nof conversion of the Note or Preferred Shares.\n\n         1.03. Purchase Price and Closing. The Company agrees to issue and sell\nto Intuit Inc. (the \"Purchaser\") and, in consideration of and in express\nreliance upon the representations, warranties, covenants, terms and conditions\nof this Agreement, the Purchaser Agrees to purchase the Note for an amount equal\nto one hundred percent (100%) of the principal amount thereof. The closing of\nthe purchase and sale of the Note hereunder (the \"Closing\") shall take place at\nthe offices of Messrs. LeBoeuf, Lamb, Greens and MacRac, L.L.P., 225 Asylum\nStyreet, Harford, CT 06103 at 10:00 a.m. on May 5, 1999, or at such time and\ndate thereafter as the Purchaser and the Company may agree (the \"Closing Date\").\nAt the Closing, the Company will deliver to the Purchaser the Note against\ndelivery of a check or checks payable to the order\n\n\n\nof the Company, or a transfer of funds to the account of the Company by wire\ntransfer, representing the net cash consideration for the Note.\n\n         1.04. Use of Proceeds. The Company shall use the cash proceeds from the\nsale of the Note for general working capital purpose.\n\n2.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY\n\n         The Company hereby represents and warrants to the Purchaser as follows:\n\n         2.01. Organization, Standing and Power. Each of the Company and the\nSubsidiaries is a corporation duly organized, validly existing and in good\nstanding under the laws of its jurisdiction of incorporation. Each of the\nCompany and the Subsidiaries has all requisite power and authority to own, lease\nand operate its properties and assets and to conduct its business as now being\nconducted and is duly qualified to do business in good standing in those foreign\njurisdictions in which such qualification is required.\n\n         2.02. Authority; Enforceability; No Conflict. The Company has all\nrequisite corporate power and authority to enter into this Agreement to issue,\nand sell the Note, and to carry out its obligations hereunder. The execution\ndelivery and performance of this Agreement by the Company and the issuance and\nsale of the Note by the Company have been duly and validly authorized by all\nrequisite corporate proceedings on the part of the Company. This Agreement when\nexecuted and delivered by the Company is a valid and binding obligation of the\nCompany, enforceable against the Company in accordance with its terms, except\nthat (i) such enforcement may be subject to bankruptcy, insolvency,\nreorganization, moratorium, rehabilitation, liquidation, conservatorship,\nreceivership, or other similar laws now or hereafter in effect relating to\ncreditors' rights generally and (ii) the remedy of specific performance and\ninjunctive and other forms of equitable relief may be subject to equitable\ndefenses and to the discretion of the court before which any preceeding therefor\nmay be brought. Except as set forth on Schedule 2.02, the execution and delivery\nof the Agreement by the Company does not, and the consummation by the Company of\nthe transactions contemplated hereby and thereby will not result in or\nconstitute; (a) a default, breach or violation of or under the Articles of\nIncorporation or the By-laws, (b) a default, breach or violation of or under any\nmortgage, deed of trust, indenture, note, bond, license, lease agreement or\nother instrument or obligation to which the Company or any Subsidary is a party\nor by which any of their respective properties or assets are bound, (c) a\nviolation of any statue, rule, regulation, order, judgement or decree of any\ncourt, public body or authority by which the Company, any Subsidiary or any of\ntheir respective properties or assets are bound, (d) an event which (with notice\nor lapse of time or both) would permit any Person to terminate, accelerate the\nperformance required by, or accelerate the maturity of any indebtedness or\nobligation of the Company or any Subsidiary under\n\n                                       2\n\n\n\n         any agreement or commitment to which the Company or any Subsidiary is a\nparty or by which the Company or any Subsidiary is bound or by which any of\ntheir respective properties or assets are bound, (e) the creation or imposition\nof any lien, charge or encumbrance on any property of the Company or any\nSubsidiary under any agreement or commitment to which the Company or any\nSubsidiary is a party or by which the Company or any Subsidiary is bound or by\nwhich any of their respective properties or assets are bound, or (f) an event\nwhich would require any consent under any agreement to which the Company or any\nSubsidiary is a party or by which the Company or any Subsidiary is bound or by\nwhich any of their respective properties or assets are bound.\n\n         2.03. Capitalization. The authorized capital stock of the Company\nconsists of:\n\n               (a) 30,000,000 shares of Common Stock, of which (1) 1,385,457\nshares are outstanding, (2) 225,225 are reserved for issuance upon conversion of\nthe Series A Preferred Stock, (3) 1,171,191 are reserved for issuance upon\nconversion of the Series B Preferred Stock, (4) 1,107,000 are reserved for\nissuance upon conversion of the Series C Preferred Stock, (5) 1, 350,000 are\nreserved for issuance upon conversion of the Series D Preferred Stock, (6)\n500,000 are reserved for issuance upon conversion of the Series E Preferred\nStock or this Note, (7) 100,000 are reserved for issuance upon conversion of the\nSpecial Preferred Stock (Northern California Division). (8) 3,000,000 are\nreserved for issuance under the Company's stock option plan, (9) 247,500 are\nreserved for issuance upon the exercise of warrants held by former 14%\nSubordinated Debenture holders, (10) 500,000 are reserved for issuance upon the\nexercise of warrants held by Superior Bank, FSB, pursuant to a Sale and\nMarketing Agreement dated as of April 28, 1995, as amended between the Company\nand Superior Bank, FSB (the \"Sale and Marketing Agreement\"), (11) 13,333 are\nreserved for issuance upon conversion of the 12% Convertible Debenture maturing\nMay 1, 1999, (12) 25,000 are reserved for issuance upon the exercise of options\nheld by John Buscema and Glen Letizia (the \"Buscema Options\"). (13) 100,000 are\nreserved for issuance upon conversion of rights, in the Releads Group held by\nJohn Tomko, Jason Massey and Dennis Brunelle under an Agreement for Operation of\nFirst Realty Network, Inc., dated as of December 5, 1996, as amended (the \" FRN\nAgreement\"); (14) 109,728 are reserved for issuance upon the exercise of the\nwarrants held or which may be obtained by FirstMN, LLC (other than as former 14%\nSubordinated Debenture holder,) (15) 92,436 are reserved for issuance upon the\nexercise of warrants held by Raymond James &amp; Associates, Inc., (16) 50,000 are\nreserved for issuance upon the exercise of warrants held by former holders or\n12% Senior Subordinated Convertible Notes dated August 31, 1997, (17) 66,667 are\nreserved for issuance upon the exercise of warrants held by former holders of\n12% Senior Subordinated Convertible Notes dated January 30, 1998, (18) 100,000\nare reserved for issuance pursuant to the exercise of warrants which may be\nearned by John T. Rodgers, Andrew M. Heller and Kyle Meyer,\n\n                                       3\n\n\npursuant to the merger agreement with RM Holdings, Inc., (19) 36,000 are\nreserved for issuance upon the exercise of warrants held by Richard A. Swartz,\nMichael E. Rubin and Samuel S. Perlman, (20) 100,000 are reserved for issuance\nupon conversion of rights held by Credit.com, LLC under the Domain Name\nAssignment Agreement dated as of January 1, 1999, between the Company and\nCredit.com LLC (the \"Domain Name Assignment\"), (21) 6,668 are reserved for\nissuance upon exercise of the warrants held by holders of the 12% Senior\nSubordinated Notes dated February 9, 1999, (22) 53,344 are reserved for issuance\nupon exercise of warrants held by holders of the 12% Senior Subordinated Notes\ndated February 26, 1999, (23) 20,000 are reserved for issuance upon exercise of\nwarrants held by holders of 12% Senior Subordinated Notes dated April 19, 1999,\n(24) 4,000 are reserved for issuance upon exercise of warrants held by Mortgage\nLoan Specialties, Inc. and First Capital Corporation of Los Angeles and (25)\n8,000 are reserved for issuance upon exercise of warrants held by Frank\nTrifeletti.\n\n               (b) 15,000,000 shares of Preferred Stock, of which (ii) 225,225\nhave been designated Series A Preferred Stock (all of which are outstanding),\n(ii) 1,000 have been designated Special Preferred Stock (Northern California\nDivision) (all of which are outstanding), (iii) 1,171,191 have been designated\nSeries B Preferred Stock (959,614 of which are outstanding), (iv) 1,107,000 have\nbeen designated Series C Preferred Stock (739,336 of which are outstanding), (v)\n1,350,000 have been designated Series D Preferred Stock (1,273,898 of which are\noutstanding and 18,650 of which have been reserved for issuance upon exercise of\nwarrants held by Dominion Fund III), and (vi) 500,000 have been designated\nSeries E Preferred Stock (458,334 of which have been reserved for issuance upon\nconversion of the Note). All of the outstanding shares of Common Stock, Series\nA Preferred Stock, Special Preferred Stock (Northern California Division),\nSeries B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock\nhave been duly authorized and validly issued, and are fully-paid and\nnon-assessable.\n\n         Except (i) the Preferred Stock referred to herein (ii) options and\nwarrants referred to herein, (iii) as required by the Sale and Marketing\nAgreement, (iv) as required by the Series B Preferered Stock Purchase Agreement\ndated as of March 29, 1996 among the Company, Purchasers of the Series B\nPreferred Stock, purchases of the Series C Preferred Stock, purchasers of the\nSeries D Preferred Stock, John T. Rodgers, Andrew M. Haller and Kyle Meyer, as\namended (\"Series B Purchase Agreement\"), (v) as required by the Operating\nAgreement for the Northern California Division dated July 1, 1997 among the\nCompany. Mason-McDuffie Real Estate, Inc. and John Hogan (\"Operating\nAgreement\"), as amended, (vi) as required by the Agreement Relating to Purchase\nof John Hogan's Rights in Northern California Division dated as of January 1,\n1998, between the Company and John Hogan, (vii) as required by the Employment\nAgreement dated July 18, 1997 between the Company and David Larson, (viii) as\nrequired by the Employment Agreements dated on or about January 28, 1998,\nbetween the Company and John T. Rodgers, Garth\n\n                                       4\n\n\n\n\nGraham and Barbara Mullen, (ix) as required by the Domain Name Assignment\nAgreement, (x) as required by the Technology Member Correspondent Agreement\ndated on or about November 1, 1998, between the Company and Mortgage Loan\nSpecialists, Inc. and (xi) as required by the Technology Member correspondent\nAgreement dated on or about November 1, 1998, between the Company and First\nCapital Corporation of Los Angeles, there are no outstanding preemptive,\nconversion or other rights, options, warrants or agreements granted or issued by\nor binding upon the Company for the purchase of acquisition of any shares of\ncapital stock of the Company or any other securities convertible into,\nexchangeable for or evidencing the right to subscribe to any shares of such\ncapital stock.\n\n         All outstanding shares of capital stock, convertible securities,\nrights, options and warrants of the Company are owned by the stockholders and in\nthe numbers specified on Schedule 2.03. Except as required by the terms of the\nBuscema Options, the Special Preferred Stock (Northern California Division), the\ncontingent repurchase rights of Superior Bank, F.S.B. under the Sale and\nMarketing Agreement, the Agreement dated as of April 1, 1998, between the\nCompany and Superior Bank, F.S.B., the FRN Agreement, the Series B Preferred\nStock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred\nStock, the Operating Agreement and the Domain Name Assignment Agreement, the\nCompany is not subject to any obligation (contingent or otherwise) to repurchase\nor otherwise acquire or reetire any shares of its capital stock or any\nconvertible securities, rights or options of the type described in the preceding\nsentence.\n\n         Except as required by the terms of the Registration Rights Agreement\ndated May 1, 1996, between the Company and Raymond James &amp; Associates, Inc., the\nRegistration Rights Agreement dated March 15, 1996, between the Company and\nMason-McDuffie Real Estate, Inc., the Operating Agreement, the Series B Purchase\nAgreement, as amended, registration rights held by Dominion Fund III under the\nWarrant to Purchase Shares of Series D Preferred Stock dated April 1, 1998 and\nthe Registration Rights Agreement dated as of January 1, 1999, between the\nCompany and Credit.com, LLC, the Company is not a party to any agreement\ngranting registration rights to any person with respect to any of its equity of\ndebt securities.\n\n         Except as set forth in the Related Agreements and the Mason-McDuffie\nMerger Agreement (which restricts the transfer of the Special Preferred Stock\nNorthern California Division)), the Company is not a party to, and it has no\nknowlege of, any agreement restricting the voting or transfer of any shares of\nthe capital stock of the Company other than agreements enforcing restrictions\nunder state and federal securities laws. The offer and sale of all capital\nstock, convertible securities, rights or options of the Company issued prior to\nthe Closing Date complied with or was exempt from all applicable federal and\nstate securities laws and no stockholder has a right of recission or damages\nwith respect thereto.\n\n                                       5\n\n\n         2.04. Subsidiaries. Schedule 2.04 sets forth each Subsidiary and each\nIndependent Division, showing the jurisdiction of the incorporation or\norganization of each Subsidiary and showing the percentage of each Person's\nownership of the outstanding stock or other interests of each such Subsidiary or\nIndependent Division. All of the outstanding shares of capital stock of each\nsubsidiary have been duly authorized and validly issued, and are fully paid and\nnon-assessable. Except as set forth on Schedule 2.04 (i) there are no\noutstanding preemptive, conversion or other rights, options, warrants or\nagreements granted or issued by or binding upon any Subsidiary or the Company\nwith respect to any Subsidiary or Independent Division for the purchase or\nacquisition of any shares of capital stock of any Subsidiary or any other\nsecurities convertible into, exchangeable for or evidencing the right to\nsubscribe for any shares of such capital stock or any other similar ownership\ninterests of any Independent Division and (ii) neither the Company nor any\nSubsidiary is subject to any obligation (contingent or otherwise) to repurchase\nor otherwise acquire or retire any shares of capital stock or any convertible\nsecurities, rights, options or warrants of any Subsidiary or similar ownership\ninterests of any Independent Division. Except as set forth herein, neither the\nCompany nor any Subsidiary is a party to, nor has any knowledge of, any\nagreement restricting the voting transfer of any shares of the capital stock of\nany Subsidiary or similar ownership interests of any independent Division.\n\n         2.05. Statue of Note and Shares. The Note to be issued at the Closing\nhas been duly authorized by all necessary corporate action on the part of the\nCompany. The shares have been duly authorized by all necessary corporate action\non the part of the Company and have been duly reserved for issuance. When the\nShares are issued such shares will be validly issued and outstanding, fully paid\nand nonassessable and the issuance of such shares will not be subject to\npreemptive or other similar contractual rights of any other stockholder of the\nCompany.\n\n         2.06. Financial Statements. As set forth on Schedule 2.06 hereto, the\naudited consolidated balance sheet of the Company and the Subsidiaries as at\nDecember 31, 1998, and the related consolidated income statements and statments\nof cash flows and changes in stockholders' equity of the Company and the\nSubsidiaries' for the fiscal periods then ended, together with the opinion\nthereon of KPMG Peat Marwick LLP, independant certified public accountants, are\ncomplete and correct in all material respects and fairly present the financial\ncondition of the Company and the Subsidiaries at such dates and the results of\nthe operations of the Company and the Subsidiaries for the periods covered by\nsuch statements, all in accordance with GAAP consistently applied.\n\n\n         2.07. Actions Pending. There is no action, suit, claim, investigation\nor proceeding pending or, to the knowlege of the Company threatened against the\nCompany or any Subsidiary which questions the validity of this Agreement or any\nof the Related Agreements or any action taken or to be taken, pursuant hereto or\nthereto.\n\n                                       6\n\n\nExcept as set forth on Schedule 2.07, there is no action, suit, claim,\ninvestigation or proceeding pending or, to the knowledge of the Company,\nthreatened, against or involving the Company, any Subsidiary or any of their\nrespective properties or assets. There are no outstanding orders, judgments,\ninjunctions, awards or decrease of any court, arbitrator or governmental or\nregulatory body against the Company or any Subsidiary.\n\n         2.08. Compliance with Law. The business of the Company and the\nSubsidiaries has been and is presently being conducted so as to comply with all\napplicable federal, state, and local governmental laws, rules, regulations and\nordinances (including, without limitation, all rules and regulations pertaining\nto the producing, processing, underwriting, selling and servicing of residential\nmortgage loans, loan brokerage operations and the sale of \"business\nopportunities\"). Each of the Company and the Subsidiaries has all franchises,\npermits, licenses, consents and other governmental or regulatory authorizations\nand approvals necessary for the conduct of its business as now being conducted\nby it.\n\n         2.09. No Material Adverse Change. Except as set forth on Schedule 2.09.\nsince December 31, 1998, (a) there has been no material adverse change in the\nbusiness, assets, operations, affairs, prospects or financial condition of the\nCompany or any Subsidiary; and (b) neither the business, financial condition,\noperation, prospects or affairs of the company, any Subsidiary nor any of their\nrespective properties or assets have been adversely affected in any material\nrespect as the result of any legislative or regulatory change, any revocation or\nchange in any franchise, permit, license or right to do business, or any other\nevent or occurrence, whether or not insured against.\n\n         2.10. Certain Fees. No broker's, finder's or financial advisory fees or\ncommissions will be payable by the Company or any Subsidiary with respect to the\ntransactions contemplated by this Agreement and the Related Agreements.\n\n         2.11. Disclosure. Neither this Agreement or the Schedules hereto, nor\nany other document, certificate or instrument furnished to the Purchaser by or\non behalf of the Company in connection with the transactions contemplated by\nthis Agreement, contains any untrue statement of a material fact or omits to\nstate a material fact necessary in order to make the statements contained herein\nor therein not misleading. The parties further agree that any agreement, event,\ncondition or other item which is disclosed on a particular Schedule hereto shall\nbe deemed to be disclosed for the purposes of all other Schedules to which it is\nrelevant, provided that all of the terms or effects of any such item which are\nrelevant to any Schedule hereto are adequately disclosed.\n\n                                       7\n\n\n\n\n         2.12. Securities Act of 1933. The Company has complied and will comply\nwith all applicable federal and state securities laws in connection with the\noffer, issuance and sale of the Note and the Shares hereunder. Neither the\nCompany nor anyone acting on its behalf has or will sell, offer to sell or\nsolicit offers to buy the Note or similar securities to, or solicit offers with\nrespect thereto from, or enter into any preliminary conversations or\nnegotiations relating thereto with, any Person, so as to bring the issuance and\nsale of the Note under the registration provisions of the Securities Act and\napplicable state securities laws.\n\n         2.13. Governmental Approvals. Except as set forth on Schedule 2.13 and\nexcept for the filing of any notice prior or subsequent to the Closing that may\nbe required under applicable state and\/or federal securities laws (which, if\nrequired, shall be filed or registration with any court or governmental\ndepartment, commission, board, bureau, agency or instrumentality, domestic or\nforeign, is or will be necessary for, or in connection with, the execution and\ndelivery by the Company of this Agreement, for the offer, issue, sale, execution\nor delivery of the Note, or for the performance by the Company of its\nobligations under this Agreement.\n\n         2.14. United States Real Property Holding Corporation. Neither the\nCompany nor any Subsidiary is now nor has ever been a \"United States Real\nProperty Holding Corporation\" as defined in Section 897(c)(2) of the Code and\nSection 1.897-2(b) of the Regulations promulgated by the Internal Revenue\nService.\n\n         2.15. Representations Under Series B Purchase Agreement. Except as set\nforth on Schedule 2.15, the representations and warranties of the Company set\nforth in Article 2 of the Series B Purchase Agreement are true and correct and\nwith the same effect as though made at and as of the date hereof, except for\nthose representations and warranties which speak of a specific date which remain\ntrue and correct as of such date.\n\n         2.16. Year 2000 Compliance. The Company's web site and all of the\nservices and products of the Company, both individually and when operating in\nconjunction with all other systems or products with which they are designed to\ninterface, are Year 2000 Compliant. \"Year 2000 Compliant\" means that such\nhardware or software will: (a) process date data from at least the years 1900\nthrough 2101 without error or interruption; (b) maintain functionality with\nrespect to the introduction, processing, or output of records containing dates\nfalling on or after January 1, 2000; and (c) be inoperable with other software\nor hardware which may deliver records to, receive records from, or interact with\nsuch hardware or software in the course of conducting the business of the\nCompany, including processing data and providing the services offered by the\nCompany. All of the Company's internal computer systems are, both individually\nand in conjunction with all other systems with which they interface, Year 2000\nCompliant. The Company has made inquiries\n\n                                       8\n\n\n\n\nof its manufacturers, suppliers and customers and, to its knowledge, the Company\nis not relying on any third party whose systems are not Year 2000 Compliant.\nExcept as set forth on Schedule 2.16, the Company does not have any material\nexpenses or other material liabilities associated with securing Year 2000\nCompliance, or making contingency arrangements to address Year 2000 Compliance\nissues, with respect to the Company's web site, services or products, internal\ncomputer systems or the computer systems or products or services of the\nCompany's manufacturers, suppliers or customers.\n\n         2.17. Patents and Other Proprietary Rights. Except as set forth on\nSchedule 2.17, (a) To the knowledge of the Company after reasonable inquiry; (l)\nthe Company has sufficient title and ownership of all patents, patent\napplications, trademarks, service marks, mask works, trade names, copyrights,\ntrade secrets, information, proprietary rights and processes (\"Intellectual\nProperty\") necessary for its business as now conducted, and believes it can\nobtain, on commercially reasonable terms, any additional rights necessary for\nits business as contemplated at the Closing, and (ii) the Company's Intellectual\nProperty does not, and would not, conflict with or constitute an infringement of\nthe rights of others;\n\n              (b) There are no outstanding options, licenses, or agreements of\nany kind that grant rights to any other Person to manufacture, license,\nproducts, assemble, market or sell the Company's products or services, nor is\nthe Company bound by or a party to any options, licenses, or agreements of any\nkind with respect to the patents, trademarks, service marks, trade name,\ncopyrights, trade secrets, licenses, information, proprietary rights, and\nprocesses of any other person or entity;\n\n              (c) The Company has not received any communications alleging that\nthe Company or its employees has violated or infringed or, by conducting its\nbusiness as proposed, would violate on infringe any of the patents, trademarks,\nservice marks, trade names, copyrights, or trade secrets, or any proprietary\nrights of any other person or entity;\n\n              (d) To the knowledge of the Company after reasonable inquiry, no\nemployee is obligated under any applicable law or under any contract (including\nlicenses, covenants, or commitments of any nature) or other agreement, or\nsubject to any judgment, decree, or order of any court or administrative agency,\nthat would interfere with the use of such employee's best efforts to promote the\ninterests of the Company or that would conflict with the Company's business as\ncontemplated at the Closing; and\n\n              (e) Neither the execution nor delivery of this Agreement, nor the\ncarrying on of the Company's business by the employees of the Company, nor the\nconduct of the Company's business as contemplated at the Closing, will, to the\nCompany's knowledge, conflict with or result in a breach of the terms,\nconditions,\n\n                                       9\n\n\n\n\nor provisions of, or constitute a default under, any contract, covenant, or\ninstrument under which any of such employees is now obligated. The Company does\nnot believe it is or will be necessary to utilize any inventions of any of its\nemployees (or people it currently intends to hire) made prior to their\nemployment by the Company where the Company does not otherwise have good title\nor valid license to such inventions.\n\n         2.18. No Conflict of Interest. Except as set forth on Schedule 2.18,\n(i) the Company is not indebted, directly or indirectly, to any of its officers\nor directors or to their respective spouses or children, in any amount\nwhatsoever other than in connection with expenses or advances of expenses\nincurred in the ordinary course of business; (ii) to the best of the Company's\nknowledge, none of the Company's officers or directors, or any members of their\nimmediate families, are, directly or indirectly, indebted to the Company (other\nthan in connection with purchases of the Company's stock) or have any direct or\nindirect ownership interest in any firm or corporation with which the Company is\naffiliated or with which the Company has a business relationship, or any firm or\ncorporation which competes with the Company except that officers, directors\nand\/or shareholders of the Company may own stock in (but not exceeding two\npercent of the outstanding capital stock of) any publicly traded companies that\nmay compete with the Company; (iii) to the best of the Company's knowledge, none\nof the Company's officers or directors or any members of their immediate\nfamilies are, directly or indirectly, interested in any material contract with\nthe Company; and (iv) the Company is not a guarantor or indemnitor of any\nindebtedness of any other person, firm or corporation.\n\n         2.19. Merger or Sale. The Company has not engaged in the past three (3)\nmonths in any discussion (i) with any representative of any corporation or\ncorporations, except for the Purchaser, regarding the merger of the Company with\nor into any such corporation or corporations, except to the extent such merger\nhas become effective prior to the date hereof, (ii) with any representative of\nany corporation, partnership, association or other business entity or any\nindividual, except for the Purchaser, regarding the sale, conveyance or\ndisposition of all or substantially all of the assets of the Company or a\ntransaction or series of related transactions in which more than fifty percent\n(50%) of the voting power of the Company would be disposed of, or (iii)\nregarding any other form of liquidation, dissolution or winding up of the\nCompany.\n\n         2.20. Disclosure. The Company has fully provided Purchaser with all the\ninformation that Purchaser has requested for deciding whether to purchase the\nNote and all information that the Company believes is reasonably necessary to\nenable Purchaser to make such a decision, including certain of the Company's\nprojections describing its proposed business (collectively, the \"Business\nPlan\"). No representation or warranty of the Company contained in this Agreement\nand the exhibits attached hereto, any certificate furnished or to be furnished\nto Purchaser at the Closing, or the Business Plan (when read together) contains\nany untrue statement\n\n                                       10\n\n\n\n\nof a material fact or omits to state a material fact necessary in order to make\nthe statements contained herein or therein not misleading in light of the\ncircumstances under which they were made. To the extent the Business Plan was\nprepared by management of the Company, the Business Plan and the financial and\nother projections contained in the Business Plan were prepared in good faith;\nhowever, the Company does not warrant that it will achieve such projections.\n\n         2.21. Tax Returns Payments. The Company has filed all tax returns and\nreports as required by law. These returns and reports are true and correct in\nall material respects. The Company has paid all taxes and other assessments due.\n\n         2.22. Labor Agreements and Actions. The Company is not bound by or\nsubject to (and none of its assets or properties is bound by or subject to) any\nwritten or oral, express or implied, contract, commitment or arrangement with\nany labor union, and no labor union has requested or, to the knowledge of the\nCompany, has sought to represent any of the employees, representatives or agents\nof the Company. There is no strike or other labor dispute involving the Company\npending, or to the knowledge of the Company threatened, which could have a\nmaterial adverse effect on the assets, properties, financial condition,\noperating results, or business of the Company, nor is the Company aware of any\nlabor organization activity involving its employees. The employment of each\nofficer and employee of the Company is terminable at the will of the Company.\nThe Company has complied in all material respects with all applicable state and\nfederal equal employment opportunity laws and with other laws related to\nemployment.\n\n3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER\n\n         The Purchaser hereby represents and warrants to the Company as follows:\n\n         3.01. Organization and Standing of the Purchaser. The Purchaser is duly\norganized, validly existing and in good standing under the laws of the\njurisdiction of its organization.\n\n         3.02. Authority; Enforceability; No Conflict. The Purchaser has all\nrequisite power and authority to enter into this Agreement and to carry out its\nobligations hereunder. The execution, delivery and performance of this Agreement\nby the Purchaser has been duly and validly authorized by all requisite\nproceedings on the part of the Purchaser. This Agreement when executed and\ndelivered by the Purchase is a valid and binding obligation of the Purchaser,\nenforceable against it in accordance with its terms, except that (i) such\nenforcement may be subject to bankruptcy, insolvency, reorganization,\nmoratorium, rehabilitation, liquidation, conservatorship, receivership or other\nsimilar laws now or hereafter in effect relating to creditors' rights generally\nand (ii) the remedy of specific performance and injunctive and other forms of\nequitable relief may be subject to equitable defenses and to the discretion\n\n                                       11\n\n\n\n\nof the court before which any proceeding therefore may be brought. The execution\nand delivery of this Agreement by the Purchaser does not, and consummation by\nthe Purchaser of the transactions contemplated hereby will not, result in or\nconstitute (a) a default, breach or violation of or under the organizational\ndocuments of the Purchaser, (b) a default, breach or violation of or under any\nmortgage, deed of trust, indenture, note, bond, license, lease agreement or\nother instrument or obligation to which the Purchaser is a party or by which any\nof its properties or assets are bound, except for any defaults, breaches or\nviolations which would not, individually or in the aggregate, have Material\nAdverse Effect on the Purchase or prevent or materially delay the consummation\nby the Purchaser of the transactions contemplated hereby, or (c) a violation of\nany statute, rule, regulation, order, judgment or decree of any court, public\nbody or authority, except for any violations which would not, individually or in\nthe aggregate, have Material Adverse Effect on the Purchaser or prevent or\nmaterially delay the consummation by the Purchaser of the transactions\ncontemplated hereby.\n\n         3.03. Acquisition for Investment. The Purchaser is an \"accredited\ninvestor\" as defined in Regulation D under the Securities Act, and is acquiring\nthe Note solely for its own account for the purposes of investment and not with\na view to or for sale in connection with any distribution thereof, and it has no\npresent intention or plan to effect any distribution of the Note. The Purchaser\nacknowledges that it is able to bear the financial risks associated with an\ninvestment in the Note and that it has been given full access to such records of\nthe Company and the Subsidiaries and to the officers of the Company and the\nSubsidiaries as it has deemed necessary and appropriate to conducting its due\ndiligence investigation. The Note may bear a legend to the following effect:\n\n          \"This security has not been registered under the Securities\n          Act of 1933, as amended, or the laws of any state and may\n          not be sold or transferred except in compliance with that\n          Act and such laws.\"\n\n         3.04. Financing. The Purchaser has sufficient funds and will have\nsufficient funds at all times through the Closing Date to consummate the\ntransactions contemplated hereby. The Purchaser will not be rendered insolvent\nby reason of its investments in the Company nor will be left with unreasonably\nsmall capital for purposes at operating its businesses.\n\n4. CONDITIONS TO PURCHASER'S OBLIGATIONS FOR CLOSING\n\n         The obligation of the Purchaser to purchase and pay for the Note to be\npurchased by it at the Closing is subject to the following conditions:\n\n                                       12\n\n\n\n         4.01. Representations and Warranties. Each of the representations and\nwarranties set forth in Section 2 hereof shall be true, accurate and correct at\nthe Closing Date with the same effect as though made at end as of such time.\n\n         4.02. Secretary's Certificate. The Purchaser shall have received a\ncertificate of the Secretary or an Assistant Secretary of the Company, dated\nthe Closing Date, (a) attesting to corporate action taken by the Company,\nincluding resolutions of the Board of Directors authorizing (i) the execution,\ndelivery and performance by the Company of this Agreement, (ii) the issuance of\nthe Note to be issued to the Purchaser, (iii) the amendment of the Company's\nArticles of Incorporation to authorize Series E Preferred Stock, and (iv) the\nexecution, delivery and performance by the Company of all other agreements or\nmatters contemplated hereby or executed in connection herewith, (b) certifying\nthe names and true signatures of the officers or the Company authorized to sign\nthis Agreement, the Note, and the other documents, instruments or certificates\nto be delivered pursuant hereto and thereto, together with the true signatures\nof such officers and (c) verifying that the Articles of Incorporation and the\nBy-Laws (see attached thereto) are true, correct and complete as of the Closing\nDate.\n\n         4.03. Officer's Certificate. The Purchaser shall have received a\ncertificate of the President and Treasurer of the Company (an \"Officer's\nCertificate\"), dated the Closing Date, which shall certify that the\nrepresentations and warranties contained in Section 2 hereof are true and\ncorrect as of the Closing Date and that all conditions required to be performed\nprior to or at the Closing have been performed as of the Closing Date.\n\n         4.04. Series E Preferred Stock. The Company shall have amended and\nrestated its Articles of Incorporation in the form attached as Exhibit B. The\nCompany shall not take any corporate action or otherwise amend its Articles of\nIncorporation prior to the conversion of the Note hereunder without the written\nconsent of the holder of the Note, if such corporate action or amendment would\nchange any of the rights, preferences, privileges of or limitations provided in\nthe Company's Articles of Incorporation with respect to the Series E Preferred\nStock.\n\n         4.05. Consents, Licenses, Approvals, etc. The Purchaser shall have\nreceived certified true copies of all consents, licenses and approvals required\nor advisable in connection with the execution, delivery, performance, validity\nand enforceability of this Agreement, and such consents, licenses and approvals\nshall be in full force and effect and be reasonably satisfactory in form and\nsubstance to the Purchaser.\n\n         4.06. Good Standing Certificates. The Purchaser shall have received a\ncertificate of the appropriate public official in the jurisdiction of\nincorporation of the Company and each Subsidiary as to the due incorporation and\ngood standing of the\n\n                                       13\n\n\n\nCompany and such Subsidiary together with, in the case of the Company, a\ncertified copy of the Articles of Incorporation of the Company.\n\n         4.07. No Proceedings of Litigation. No action, suit or proceeding\nbefore any arbitrator or any governmental authority shall have been commenced,\nand no investigation by any governmental authority shall have been threatened,\nagainst the Company or any Subsidiary, or any of the officers or directors of\nthe Company or any Subsidiary seeking to restrain, prevent or change the\ntransactions contemplated by this Agreement, or seeking damages in connection\nwith such transactions.\n\n         4.08. [Intentionally Omitted]\n\n         4.09. Legal Opinions. The Purchaser shall have received a legal opinion\nfrom Foley &amp; Lardner, counsel to the Company, dated the Closing Date and\nsubstantially in the form of opinion attached as Exhibit C.\n\n         4.10. Consents and Waivers of Equity Holders. The Company shall have\nobtained written agreements from a majority of the holders of each of the Series\nA, Series B, Series C and Series D Preferred Stock consenting to the issuance of\nthe Note and to the establishment and conversion of the Series E Preferred Stock\nand waiving any rights of first offer such holders may otherwise have with\nrespect to the issuance of the Note or the Shares.\n\n         4.11. Other Consents. The Company shall have obtained consent to the\ntransactions contemplated hereby from Cooper River Funding, Inc. Residential\nFunding Corporation and Bank United pursuant to the terms of the Cooper River\nFunding Agreement, Residential Funding Agreement and Bank United Funding\nAgreement, respectively. The Company shall have obtained a written agreeement\nfrom Superior Bank FSB that the transactions contemplated hereby do not\nconstitute a \"Material Transaction Event\" in accordance with the provisions of\nthat certain Buyback Agreement by and between the Company and Superior Bank FSB,\ndated April 1, 1998.\n\n         4.12. Expenses. All fees and disbursements required to be paid pursuant\nto Section 13.04 hereof shall have been paid in full.\n\n         4.13. Compliance with this Agreement. The Company shall have performed,\nsatisfied and complied in all material respects with all covenants, agreements\nand conditions required by this Agreement to be performed, satisfied or complied\nwith by the Company at or prior to the Closing.\n\n         4.14. Proceedings Satisfactory. All proceedings taken in connection\nwith the issuance and sale of the Note and all documents and papers relating\nthereto shall be satisfactory in form and substance to the Purchaser. The\nPurchaser shall have\n\n                                       14\n\n\n\n\nreceived copies of such documents and papers as they may reasonably request in\nconnection with this Agreement.\n\n         4.15. Proxy. The Seth Werner Revocable Trust shall have executed an\nirrevocable proxy in favor of the Purchaser in the form attached as Exhibit D.\n\n5. COVENANTS OF THE COMPANY\n\n         5.01. Covenants of the Company Under the Series B Purchase Agreement.\nThe Company covenants and agrees that on and after the Closing Date and until\nthe earlier of (i) the date on which the Note shall be paid in full and Shares\nshall no longer be held of record by the Purchaser or (ii) the consummation of a\nQualified Public Offering (as defined in the Series B Purchase Agreement) it\nwill comply, for the benefit of the Purchaser, in all respects with the\ncovenants of the Company set forth in Articles 6 and 7 of the Series B Purchase\nAgreement.\n\n         5.02. Future Senior Subordinated Obligations. The Company covenants and\nagrees that on or after the Closing Date, it will not incur any liability for\nborrowed money evidenced by a note or similar obligation, other than Senior\nDebt, Future Senior Subordinated Obligations and trade accounts payable incurred\nin the ordinary course of business, which is not expressly subordinate to,\njunior in right of payment by its terms to, and on terms and conditions approved\nby the holder of the Senior Subordinated Obligations.\n\n         5.03. Issuance of Equity Securities. The Company shall not issue any\nequity securities or any warrants, options or other rights to acquire equity\nsecurities or take any other action prior to the conversion of the Note\nhereunder if such action would cause the Conversion Value to be less than\n$60.00, unless prior to taking such action, the Company (a) shall have obtained\nfrom a majority of the holders of Series B, Series C and Series D Preferred\nStock (i) a written consent to the issuance of the shares of Series E Preferred\nStock required to be issued upon conversion of the Note following such reduction\nin the Conversion Value and to the amendment of the Articles of Incorporation to\nauthorize a sufficient number of shares for such conversion and (ii) a waiver of\nany preemptive rights such holders may otherwise have with respect to the\ninsurance of such additional shares and (b) shall have amended its Articles of\nIncorporation to authorize a sufficient number of shares of Series E Preferred\nStock and\/or Common Stock to satisfy the conversion rights of the Purchaser\nhereunder. The Company shall not issue shares of the Series E Preferred Stock\nprior to the conversion of the Note hereunder without the written consent of the\nholder of the Note.\n\n                                       15\n\n\n\n\n6. REGISTRATION, TRANSFER AND SUBSTITUTION OF NOTE\n\n         6.01 Note Register; Ownership of Notes. The Company will keep at its\nprincipal office a register in which the Company will provide for the\nregistration of Notes and the registration of transfers of Notes. The Company\nmay treat the Person in whose name any Note is registered on such register as\nthe owner thereof for the purpose of receiving payment of the principal of and\nthe premium, if any, and interest on such Note and for all other purposes,\nwhether or not such Note shall be overdue, and the Company shall not be affected\nby any notice to the contrary.\n\n         6.02. Transfer and Exchange of the Note. Upon surrender of the Note for\nregistration of transfer or for exchange to the Company at its principal office,\nthe Company at its expenses will execute and delivery in exchange therefor a new\nNote or Notes of the same class as such surrendered Note in denominations, as\nrequested by the holder or transferee, which aggregate the unpaid principal\namount of such surrendered Note. Each such new Note shall be registered in the\nname of such Person as such holder or transferee may request, shall be dated so\nthat there will be no loss of interest on such surrendered Note and shall be\notherwise of like tenor.\n\n         6.03. Replacement of Notes. Upon receipt of evidence reasonably\nsatisfactory to the Company of the loss, theft, destruction or mutilation of any\nNote and, in the case of any such loss, theft or destruction, upon delivery of\nan indemnity bond in such reasonable amount as the Company may determine (or, in\nthe case of any Note held by a Purchaser or any institutional investor, of any\nindemnity agreement from the Purchaser or such other holder reasonably\nsatisfactory to the Company), or in the case of any such mutilation, upon the\nsurrender of such Note for cancellation to the Company at its principal office,\nthe Company at its expense will execute and deliver, in lieu thereof, a new Note\nof the same class and of like tenor, dated so that there will be no loss of\ninterest on such lost, stolen, destroyed or mutilated Note. Any Note in lieu of\nwhich any such new Note has been executed and delivered by the Company shall not\nbe deemed to be an outstanding Note for any purpose hereof.\n\n7. PAYMENTS ON NOTES: REDEMPTION; CONVERSION\n\n         7.01. Place of Payment. Payments of principal and interest becoming due\nand payable on the Note shall be made at the address of each holder set forth on\nSchedule 1.01 hereof, unless the Company, by written notice from each holder of\nany Note, shall be notified to make payment at a different address.\n\n         7.02. [Intentionally Omitted].\n\n         7.03. Mandatory Redemption. The Company shall, upon notice not less\nthan 60 days prior to the date fixed for such redemption and after giving the\nholder of the\n\n                                       16\n\n\n\n\nNote reasonable opportunity to convert the Note under Section 7.07 below, redeem\nthe Note at 100% of the principal amount thereof without premium on the earlier\nof (a) the Final Maturity Date (b) the Initial Public Offering, or (c) a merger\nof the Company with or into any other corporations, the conveyance transfer or\nlease of substantially all of its assets in a single transaction or series of\ntransactions, or a sale in one or more transactions of more than 50% of the\nCommon Stock of the Company on a fully diluted basis. Failure to provide notice\nas required above shall not invalidate any such redemption, except where failure\nto provide such notice does not allow the holder of the Note reasonable\nopportunity to convert the Note as provided in Section 7.07 below.\n\n         7.04. Optional Redemption. (a) At any time or from time to time the\nCompany may, at its option, upon notice to the Purchaser not less than 60 days\nprior to the date fixed for such redemption and after giving the holder of the\nNote reasonable opportunity to convert the Note under Section 7.07 below, redeem\nall or any part of the Note at 100% of the principal amount of the Note so\nredeemed. Failure to provide notice as required above shall not invalidate any\nsuch redemption, except where failure to provide such notice does not allow the\nholder of the Note reasonable opportunity to convert the Note as provided in\nSection 7.07 below.\n\n               (b) Any redemption of the Note pursuant to this Section 7.04\nshall be accompanied by an Officer's Certificate (a) stating the principal\namount of the Note to be redeemed, (b) stating the proposed date of redemption\n(c) stating the accrued interest on each such Note to the proposed date of\nredemption to be paid in accordance with Section 7.06 and (d) stating that the\nproposed redemption does not violate Article 8 of this Agreement or the terms or\nany subordination agreement to which the Note may be subject.\n\n         7.05. [Intentionally Omitted.]\n\n         7.06. Maturity; Surrender; etc. In the case of the redemption of the\nNote, the principal amount of the Note to be redeemed shall mature and become\ndue and payable on the date fixed for such redemption, together with interest on\nsuch principal amount accrued to such date. From and after such date, unless the\nCompany shall fail to pay such principal amount when so due and payable,\ntogether with the interest, interest on such principal amount shall cease to\naccrue. Any Note redeemed in full shall be surrendered to the Company upon the\nCompany's written request and cancelled and shall not be reissued, and no Note\nshall be issued in lieu of any repaid principal amount of any Note.\n\n         7.07. Conversion Privilege. In the event the Purchaser shall give\nirrevocable written notice to the Company that it will not make an offer to the\nCompany to acquire, by merger or otherwise, 50% or more of the Common Stock or\nassets of the Company (the date of such notice being the \"Conversion Date\"), the\nunpaid principal\n\n                                       17\n\n\n\n\namount of the Note outstanding or any portion thereof may, at the election of\nthe holder thereof, at any time on or after the Conversion Date, be converted\ninto the number of fully paid and nonassessable (i) shares of Series E Preferred\nStock, or (ii) if an event of automatic conversion shall have occurred with\nrespect to the Series E Preferred Stock, shares of Common Stock, determined\npursuant to this Section 7.O7. The number of shares of Series E Preferred Stock\nor Common Stock to which the holder of the Note shall be entitled to receive\nupon conversion shall be the product obtained by dividing the principal amount\nof the Note being converted by the Conversion Value. The holder shall exercise\nthis privilege by delivery to the Company of a written notice at least 10 days\nprior to the date fixed for conversion specifying the principal amount of the\nNote to be converted.\n\n8. SUBORDINATION OF SENIOR SUBORDINATED OBLIGATIONS\n\n         8.01. Generally. All Senior Subordinated Obligations are subordinate\nand junior in right of payment to all Senior Debt, but only to the extent\nprovided in this Article 8.\n\n         8.02. Restrictions. Except to the extent expressly permitted in this\nArticle, or as otherwise consented to in writing by all holders of Senior Debt,\nthe Purchaser shall not (a) receive payment of or collect in whole or in part,\nor sue upon, the Senior Subordinated Obligations; (b) sell, assign, transfer,\npledge, hypothecate or encumber the Senior Subordinated Obligations unless the\nproposed purchaser, assignee, transferee or pledgee acknowledges in writing that\nit is bound by this Article; (c) enforce any lien they may now or in the future\nhave on the Senior Subordinated Obligations; (d) join in any petition in\nbankruptcy, assignment for the benefit of creditors or creditors' agreement,\nother than the filing of a claim or proof of debt or except as directed by all\nholders of Senior Debt, so long as the Senior Debt of Company, or commitment to\nextend credit to the Company in respect thereof, is in existence; or (e) accept\nany pledge or transfer of property (other than shares of stock of the Company)\nas security for or in payment of the Senior Subordinated Obligations, or\notherwise deface the Senior Subordinated Obligations.\n\n         8.03. Permitted Payments. So long as no default shall have occurred in\npayment or performance of any obligation of the Company with respect to the\nSenior Debt, payments of interest and principal on the Senior Subordinated\nObligations may be made at payment dates as specified under the Note (it being\nunderstood that no prepayment shall be made of the Senior Subordinated\nObligations and no modification, for default or otherwise, of such payment dates\nas specified in the Note shall be permitted without the prior written consent of\nall holders of the Senior Debt). Upon prior written notice to all holders of the\nSenior Debt, the Purchaser shall be permitted to accelerate the Senior\nSubordinated Obligations upon any Event of Default (as defined herein). In the\nevent the Company or any holder of Senior Debt provides notice to the Purchaser\nof default with respect to the Senior Debt of the Company,\n\n                                       18\n\n\n\n\nno interest and no principal payments on the Senior Subordinated Obligations\nshall be made without the prior written consent of all holders of such Senior\nDebt. The subordination of claims of the Purchaser hereunder shall remain in\neffect so long as there shall be outstanding any Senior Debt of the Company.\n\n         8.04. Turnover of Payments. In the event that the Purchaser receives a\npayment from the Company in violation of the terms of this Article 8, the\nPurchaser (a) shall hold such money in trust for the benefit of the holders of\nSenior Debt, and (b) shall, upon request of the holders of Senior Debt,\nforthwith remit an amount equal to such payment to such holders, or the payment\nin the exact form received (but with any necessary endorsement to such holders\nwithout recourse). After the Purchaser has received notice that a payment has\nbeen made to the Purchaser in violation of the terms of this Article 8, the\nPurchaser shall segregate such payment from (and shall not commingle such\npayment with any of) the other funds of the Purchaser.\n\n         8.05. Insolvency, etc. In case of any assignment of the Company for the\nbenefit of creditors, or in case of any bankruptcy proceedings instituted by or\nagainst the Company, or in case of the appointment of any receiver for the\nCompany's business or assets, or in case of any dissolution or winding up of the\naffairs of the Company, the Company and any assignee, trustee in bankruptcy,\nreceiver, or other person or persons in charge, are hereby directed to pay to\nthe holders of Senior Debt the full amount of the Senior Debt of the Company\nbefore making any payment of principal or interest to the Purchaser. Upon\npayment in full of the amount of the Senior Debt, the Purchaser shall be\nentitled to receive any excess proceeds.\n\n         8.06. Obligations Not Impaired. Nothing contained in this Article 8\nshall impair, as between the Company and any holder of Senior Subordinated\nObligations, the obligation of the Company to pay to such holder the principal\nthereof and premium, if any, and interest thereon as and when the same shall\nbecome due and payable in accordance with the terms thereof, or prevent any\nholder of Senior Subordinated Obligations from exercising all rights, powers and\nremedies otherwise permitted by applicable law or under any agreement under\nwhich such Senior Subordinated Obligations were incurred, all subject to the\nrights of the holders of Senior Debt to receive cash, securities or other\nproperty otherwise payable or deliverable to the holders of Senior Subordinated\nObligations.\n\n         8.07. Payment of Senior Debt Subrogation. Upon the payment in full in\ncash of all Senior Debt, the holders of Senior Subordinated Obligations shall be\nsubrogated to all rights of any holder of Senior Debt to receive any further\npayments or distributions applicable to Senior Debt until all Senior\nSubordinated Obligations shall have been paid in full, and such payments or\ndistributions received by the holders of Senior Subordinated Obligations by\nreason of such subrogation, of cash, securities or other property that otherwise\nwould be paid or distributed to the holders of Senior Debt, shall, as between\nthe Company and its creditors other than the holders of\n\n                                       19\n\n\n\n\nSenior Debt, on the one hand, and the holders of Senior Subordinated\nObligations, on the other hand, be deemed to be payment by the Company on\naccount of Senior Debt and not on account of Senior Subordinated Obligations.\n\n9. EVENTS OF DEFAULT AND ACCELERATION\n\n         The following conditions or events shall constitute events of default\n(\"Events of Default\"):\n\n              (a) if the Company shall default in the payment of any principal\non any Note when the same becomes due and payable, whether at maturity or at a\ndate fixed for prepayment or by declaration or otherwise; or\n\n              (b) if the Company shall default in the payment of any interest on\nany Note for more than five days after the same becomes due and payable; or\n\n              (c) if the Company shall default in the performance of or\ncompliance with any term contained in Article 5 hereto; or\n\n              (d) if the Company shall default in the performance of or\ncompliance with any other term contained herein or in the Related Agreements and\nsuch default shall not have been remedies within 30 days after the earlier of\n(x) an officer of the Company obtaining knowledge of such default and (y)\nreceipt by the Company of written notice of such default from any holder of any\nNote; or\n\n              (e) if any representation or warranty made in writing by or on\nbehalf of the Company herein or in any instrument furnished in compliance with\nor in reference hereto or otherwise in connection with the transactions\ncontemplated hereby shall prove to have been false or incorrect in any material\nrespect on the date as of which made; or\n\n              (f) if the Company or any Subsidiary shall be in default (as\nprincipal or as guarantor or other surety) in the payment of any principal of or\npremium or interest on any indebtedness with a principal amount in excess of\n$50,000 (other than the Note) or in the performance of or compliance with any\nterm of any evidence of any such indebtedness or of any mortgage, indenture or\nother agreement relating thereto the effect of which is to cause such\nindebtedness to become due and payable before its stated maturity or before its\nregularly scheduled dates of payment, and such default, event or condition shall\ncontinue for more than the period of grace, if any, specified therein and shall\nnot have been waived pursuant thereto; or\n\n              (g) if the Company or any Subsidiary shall (i) be generally not\npaying its debts as they become due, (ii) file, or consent by answer or\notherwise to the filing against it of, a petition for relief or reorganization\nor arrangement or any other petition\n\n                                       20\n\n\n\n\nin bankruptcy, for liquidation or to take advantage of any bankruptcy or\ninsolvency law of any jurisdiction, (iii) make an assignment for the benefit of\nits creditors, (iv) consent to the appointment of a custodian, receiver, trustee\nor other officer with similar powers with respect to it or with respect to any\nsubstantial part of its property, (v) be adjudicated an insolvent or be\nliquidated, or (vi) take corporate action for the purpose of any of the\nforegoing; or\n\n              (h) if a court or governmental authority of competent jurisdiction\nshall enter an order appointing, without consent by the Company or any\nSubsidiary, a custodian, receiver, trustee or other officer with similar powers\nwith respect to it or with respect to any substantial part of its property, or\nconstituting an order for relief or approving a petition for relief or\nreorganization or any other petition in bankruptcy or for liquidation or to take\nadvantage of any bankruptcy or insolvency law of any jurisdiction, or ordering\nthe dissolution, winding-up or liquidation of the Company or any Subsidiary, or\nif any such petition shall be filed against the Company of any Subsidiary and\nsuch petition shall not be dismissed within 30 days; or\n\n              (i) if a final judgment which, with other outstanding final\njudgments against the Company and the Subsidiaries, exceeds $100,000 shall be\nentered against the Company or any Subsidiary and if, within 60 days after entry\nthereof, such judgment shall not have been discharged or execution thereof\nstayed pending appeal, or if, within 60 days after the expiration of any such\nstay, such judgment shall not have been discharged.\n\n10. REMEDIES ON DEFAULT, ETC.\n\n         10.01. Remedies. Upon the occurrence of any Event of Default, the\nholder of the Note may proceed to protect and enforce its rights by suit in\nequity, action at law and\/or other appropriate proceeding either for specific\nperformance of any covenant, provision or condition contained in this Agreement\nor any Related Agreement, or in aid of the exercise of any power granted in this\nAgreement or any Related Agreement, and (unless there shall have occurred an\nEvent of Default under Section 9(g) or 9(h), in which case the unpaid balance of\nthe Note shall automatically become due and payable) may at its option by notice\nto the Company declare all or any part of the unpaid principal amount of the\nNote then outstanding to be forthwith due and payable, and thereupon such unpaid\nprincipal amount or part thereof, together with interest accrued thereon and all\nother sums, if any, payable under this Agreement, the Note or the other Related\nAgreements, shall become so due and payable without presentation, presentment,\nprotest or further demand or notice of any kind, all of which are hereby\nexpressly waived, and such holder or holders may proceed to enforce payment of\nsuch amount or part thereof in such manner as it or they may elect.\n\n                                       21\n\n\n         10.02 Annulment of Defaults. An Event of Default shall not be deemed\nto be in existence or to have occurred for any purpose of this Agreement until\nthe expiration of all grace periods under this Agreement or if the holder of the\nNote shall have waived such event in writing or stated in writing that the same\nhas been cured to its reasonable satisfaction. No waiver or statement of\nsatisfactory cure pursuant to this Section 10.02 shall extend to or affect any\nsubsequent or other Event of Default not specifically identified in such waiver\nor statement of satisfactory cure pursuant to this Section 10.02 shall extend to\nor affect any subsequent or other Event of Default not specifically identified\nin such waiver or statement of satisfactory cure or impair any of rights of the\nholder of any Note or Shares upon the occurence thereof.\n\n         10.03 Waivers. The Company hereby waives to the extent not prohibited\nby applicable law which cannot be waived (a) all presentments, demands for\nperformance, notice of nonperformance (except to the extent specifically\nrequired by the provisions hereof), (b) any requirement of diligence or\npromptness on the part of any holder of the Note or the Shares in the\nenforcement of its rights under this Agreement or the Note, (c) except to the\nextent required by other provisions of this Agreement, any and all notices of\nevery kind and description which may be required to be given by any statute or\nrule of law, and (d) any defense of any kind (other than indefeasable payment)\nwhich it may now or hereafter have with respect to its liability under this\nAgreement.\n\n11. DEFINITIONS AND ACCOUNTING TERMS\n\n         11.01. Certain Defined Terms. As used in this Agreement, the following\nterms shall have the following meanings:\n\n         \"12% Subordinated Debentures\" shall mean the 12% Convertible\nSubordinated Debentures issued by the Company, maturing on May 1, 1999.\n\n         \"14% Subordinated Debenture Holders\" shall mean any holder of the 14%\nSubordinated Debentures.\n\n         \"14% Subordinated Debentures\" shall mean the 14% Subordinated\nDebentures, issued by the Company maturing on September 30, 1997.\n\n         \"Additional Interest\" shall have the meaning assigned to such term\ninSection 7.02.\n\n         \"Agreement\" shall mean this $27,500,000 Note Purchase Agreement,\nincluding all amendments, modifications or supplements thereto.\n\n         \"Articles of Incorporation\" shall mean the Articles of Incorporation of\nthe Company, including all amendments, modifications or supplements thereto.\n\n                                       22\n\n\n         \"Bank United Funding Agreement\" shall mean that certain Warehousing\nCredit and Security Agreement dated as of July 1, 1998 between the Company and\nBank United.\n\n         \"Board of Directors\" shall mean the Board of directors of the Company\nas constituted from time to time.\n\n         \"Buscema Options\" shall have the meaning assigned to such term in\nSection 2.03.\n\n         \"Business Plan\" shall have the meaning assigned to such term in Section\n2.21.\n\n         \"By-Laws\" shall mean the By-Laws of the Company, including all the\namendments, modifications or supplements thereto.\n\n         \"Closing\" shall have the meaning assigned to such term in Section 1.03.\n\n         \"Closing Date\" shall have the meaning assigned to such term in Section\n1.03.\n\n         \"Common Shares\" shall have the meaning assigned to such term in Section\n1.02.\n\n         \"Common Stock\" shall mean (a) the Company's Common Stock, $0.01 par\nvalue, as authorized on the date of this Agreement, (b) any other capital stock\nof any class or classes (however designated) of the Company, authorized on or\nafter the date hereof, the holders of which shall have the right, without\nlimitation as to amount, either to all or to a share of the balance of current\ndividends and liquidating dividends after the payment of dividends and\ndistributions on any shares entitled to preference, and the holders of which\nshall ordinarily, in the absence of contingencies or in the absence of any\nprovision to the contrary in the Certificate of Incorporation or the By-laws, be\nentitled to vote for the election of a majority of directors of the Company\n(even though the right so to vote has been suspended by the happening of such a\ncontingency or provision), and (c) any other securities into which or for which\nany of the securities described in (a) or (b) may be converted or exchanged\npursuant to a plan of recapitalization, reorganization, merger, sale of assets\nor otherwise.\n\n         \"Company\" shall have the meaning assigned to such term in the\nintroductory sentence hereof.\n\n         \"Conversion Date\" shall have the meaning assigned to such term in\nSection 7.07.\n\n         \"Conversion Value\" shall mean (i) $60.00 (with respect to conversion of\nthe Note to shares of Series E Preferred Stock), and (ii) the Series E\nApplicable\n\n                                       23\n\nConversion Value, as defined in the Articles of Incorporation of the Company, as\namended and restated (with respect to conversion of the Note to shares of Common\nStock).\n\n         \"Cooper River Funding Agreement\" shall mean that certain Warehousing\nCredit Agreement dated as of August 7, 1998 between the Company and Cooper River\nFunding, Inc.\n\n         \"Domain Name Assignment Agreement\" shall have the meaning assigned to\nsuch term in Section 2.03.\n\n         \"Event of Default\" shall have the meaning assigned to such term in\nArticle 9.\n\n         \"Final Maturity Date\" shall have the meaning assigned to such term in\nSection 1.01.\n\n         \"FRN Agreement\" shall mean that certain Second Amendment to Agreement\nfor the Operation of First Realty Network, Inc., dated on or about December 23,\n1996, among the Company, Releads U.S.A., Inc., First Realty Network, Inc.,\nConsumer Real Estate Research, Inc., and John Tomko, Jason Massey and Dennis\nBrunelle.\n\n         \"Future Senior Subordinated Obligations\" shall mean any indebtedness\nconsented to by the holder of the Senior Subordinated Obligations.\n\n         \"GAAP\" shall mean generally accepted accounting principles in the\nUnited States of America as in effect from time to time, applied on a basis\nconsistent with those used in the preparation of the financial statements\nreferred to in Section 2.06 (except for changes concurred in by the independent\npublic accountants to the Company and the Subsidiaries).\n\n         \"Indebtedness\" shall mean (a) any liability for borrowed money or\nevidenced by a note or similar obligation given in connection with the\nacquisition of any property or other assets (other than trade accounts payable\nincurred in the ordinary course of business); (b) all guaranties, endorsements\nand other contingent obligations, in respect of indebtedness of others, whether\nor not the same are or should be reflected in the Company's balance sheet (or\nthe notes thereto), except guaranties by endorsement of negotiable instruments\nfor deposit or collection or similar transactions in the ordinary course of\nbusiness, and (c) the present value of any lease payments due under leases\nrequired to be capitalized in accordance with GAAP.\n\n         \"Independent Division\" shall mean any division of the Company or any\nSubsidiary which is organized or operated pursuant to an agreement with any\nother.\n\n                                       24\n\nPerson or Persons which grants such Person or Persons an ownership interest in\nor other claim to the assets, revenue or value of such Division.\n\n         \"Initial Public Offering\" shall mean an initial public offering of the\nCompany's Common Stock pursuant to a registration statement filed under the\nSecurities Act of 1933, as amended.\n\n         \"Intellectual Property\" shall have the meaning assigned to such term in\nSection 2.17.\n\n         \"Mason-McDuffie Merger Agreement\" shall mean the Agreement and Plan of\nMerger dated as of March 15, 1996 among the Company, Western American Mortgage\nCompany and Mason McDuffie Real Estate, Inc. and the Amended and Restated\nOperating Agreement as of July 1, 1998 among the Company, Mason-McDuffie Real\nEstate, Inc. and John Hogan.\n\n         \"Material Adverse Effect\" means any material adverse effect on (a) the\nbusiness, profits, properties or condition of the Company and the Subsidiaries,\ntaken as a whole, (b) the ability of the Company to perform its obligations\nunder the Agreement or any Related Agreement and (c) the binding nature,\nvalidity or enforceability of this Agreement or any Related Agreement, which, in\neach case, arises from, or reasonably could be expected to arise from, any\naction or omission of action on the part of the Company or any subsidiary or\nthe occurence of any event or the existence of any fact or condition in respect\nof the Company or any Subsidiary or any of their respective properties.\n\n         \"Note\" shall have the meaning assigned to such term in Section 1.01.\n\n         \"Operating Agreement\" shall mean the Operating Agreement for the\nNorthern California Division, dated on or about July 1, 1997, among the Company,\nMason-McDuffie Real Estate, Inc., and John Hogan.\n\n         \"Person\" shall mean an individual, corporation, partnership, joint\nventure, trust, university, or unincorporated organization, or a government or\nany agency or political subdivision thereof.\n\n         \"Preferred Shares\" shall have the meaning assigned to such term in\nSection 1.02.\n\n         \"Purchaser\" shall have the meaning assigned to such term in Section\n1.03.\n\n         \"Residential Funding Agreement\" shall mean that certain First Amended\nand Restated Warehousing Credit and Security Agreement dated as of June 8, 1994\nbetween the Company and Residential Funding Corporation, as amended.\n\n                                       25\n\n\n\n\n         \"Related Agreements\" shall mean the Note, the Series B Purchase\nAgreement and the \"Related Documents\" defined therein, including all amendments,\nmodifications or supplements thereto.\n\n         \"Sale and Marketing Agreement\" shall have the meaning assigned to such\nterm in Section 2.03.\n\n         \"Securities Act\" shall mean the Securities Act of 1933, as amended from\ntime to time or any other federal set, rule or regulation requiring registration\nwith any federal agency in connection with a public offering of registration\nsecurities.\n\n         \"Senior Debt\" shall mean the unpaid principal of, premium (if any) and\ninterest of the Warehouse Lines of Credit.\n\n         \"Senior Subordinated Obligations\" shall mean the unpaid principal of,\npremium (if any) and interest on the Note and all other obligations of the\nCompany and the Subsidiaries of any kind whatsoever under or in respect of this\nAgreement and the Related Agreements.\n\n         \"Series A Preferred Stock\" shall mean the shares of Preferred Stock\ndesginated Series A Referred Stock.\n\n         \"Series B Preferred Stock\" shall mean the shares of Preferred Stock\ndesignated Series B Preferred Stock.\n\n         \"Series B Purchase Agreement\" shall mean that certain Series B\nPreferred Stock Purchase Agreement, dated as of March 29, 1996, by and among\nthe Company and the Purchaser listed on Schedule 1.01 thereto, as amended.\n\n         \"Series C Preferred Stock\" shall mean the shares of Preferred Stock\ndesignated Series C Preferred Stock.\n                                    \n\"Series D Preferred Stock\" shall mean the shares of Preferred Stock desginated \nSeries D Preferred Stock.\n                         \n         \"Series E Preferred Stock\" shall mean the shares of Preferred Stock\ndesignated Series E Preferred Stock.\n\n         \"Shares\" shall have the meaning assigned to such term in Section 1.02.\n\n         \"Special Preferred Stock (Northern California Division)\" shall mean the\nshares of Preferred Stock designated Special Preferred Stock (Northern\nCalifornia Division).\n\n                                       26\n\n\n         \"Stock Option Plan\" shall mean any qualified or non-qualified incentive\nstock option plan of the Company which is adopted by the Board of Directors,\nincluding all amendments, supplements or modifications thereto.\n\n         \"Subsidiary\" shall mean any corporation or other entity of which at\nleast a majority of the securities or other ownership interest having ordinary\nvoting power (absolutely or contingently) for the election of directors or\nother persons performing similar functions are at the time owned directly or\nindirectly by the Company and\/or any of its other Subsidiaries.\n\n         \"Warehouse Lines of Credit\" shall mean collectively (i) the line of\ncredit of the Company with Residential Funding Corporation pursuant to the\nResidential Funding Agreement, as the same may be amended or increased or\notherwise modified from time to time and any refinancing or replacements\nthereof, (ii) the line of credit of the Company with Bank United pursuant to the\nBank United Funding Agreement, as the same way may be amended or increased or\notherwise modified from time to time any refinancing or replacements thereof,\n{iii} the line of credit of the Company with Cooper River Funding Inc. pursuant\nto the Cooper River Funding Agreement, as the same may be amended or increased\nor otherwise modified from time to time and any refinancing or replacement\nthereof and (iv) any other similar line of credit approval by the Required\nHolders, the terms of which require the Senior Subordinated Obligations to be\nsubordinated to the borrowings by the Company thereunder.\n                               \n         \"Year 2000 Compliment\" shall have the meaning assigned to such term in\nSection 5.05.\n\n         11.02. Accounting Terms. All accounting terms not specifically defined\nherein shall be construed in accordance with GAAP consistently applied, and all\nfinancial data submitted pursuant to this Agreement, unless otherwise specified,\nshall be prepared in accordance with GAAP.\n\n12.      INDEMNIFICATION\n\n\n         12.01. General Indemnity. The Company agrees to indemnify and save\nharmless the Purchaser and its respective directors, officers, affiliates,\nsuccessors and assigns from and against any and all losses, liabilities,\ndeficiencies, costs, damages and expenses (including, without limitation,\nreasonable attorneys' fees, charges and disbursements) incurred by the Purchaser\nas a result of any inaccuracy in or breach of the representations, warranties or\ncovenants made by the Company herein or in any of the Related Agreements. The\nPurchaser agrees to indemnify and save harmless the Company and its directors,\nofficers, affiliates, successors and assigns from and against any and all\nlosses, liabilities, deficiencies, costs, damages and expenses (including,\nwithout limitation, reasonable attorneys' fees, charges and\n\n                                       27\n\n\ndisbursements) incurred by any such Person as a result of any inaccuracy in or\nbreach of the representations, warranties or covenants made by the Purchaser\nherein.\n\n         12.02. Indemnification Procedure. Any party entitled to indemnification\nunder this Section 12 (an \"indemnified party\") will give written notice to the\nindemnifying party of any claim with respect to which it seeks indemnification\npromptly after the discovery by such party of any matters giving rise to a claim\nfor indemnification; provided that the failure of any party entitled to\nindemnification hereunder to give notice as provided herein shall not relieve\nthe indemnifying party of its obligations under this Section 12 except to the\nextent that the indemnifying partying is actually prejudiced by such failure to\ngive notice. In case any action, proceeding or claim is brought against an\nindemnified party in respect of which indemnification is sought hereunder, the\nindemnifying party shall be entitled to participate in and, unless in the\nreasonable judgment of the indemnified party a conflict of interest between it\nand the indemnifying party may exist in respect of such action, proceeding or\nclaim, to assume the defense thereof, with counsel reasonably satisfactory to\nthe indemnified party. In the event that the indemnifying party advises an\nindemnified party that it will contest such a claim for indemnification\nhereunder, or fails, within (30) days of receipt of any indemnification notice\nto notify, in writing, such person of its election to defend, settle or\ncompromise, at its sole cost and expenses, any action, proceeding or claim (or\ndiscontinues its defense at any time after it commences such defense), then the\nindemnified party may, at its option, defend, settle or otherwise compromise or\npay such action or claim. In any event, unless and until the indemnifying party\nelects in writing to assume and does so assume the defense of any such claim,\nproceeding or action, the indemnified party's costs and expenses arising out of\nthe defense, settlement or compromise of any such action, claim or proceeding\nshall be losses subject to indemnification hereunder. The indemnified party\nshall cooperate fully with the indemnifying party in connection with any\nnegotiation or defense of any such action or claim by the indemnifying party and\nshall furnish to the indemnifying party all information reasonably available to\nthe indemnified party which relates to such action or claim. The indemnifying\nparty shall keep the indemnified party fully apprised at all times as to the\nstatus of the defense or any settlement negotiations with respect thereto. If\nthe indemnifying party elects to defend any such action or claim, then the\nindemnified party shall be entitled to participate in such defense with counsel\nof its choice at its sole cost and expense. The indemnifying party shall not be\nliable for any settlement of any action, claim or proceeding effected without\nits written consent, provided, however, that the indemnifying party shall not\nunreasonably withhold, delay or condition its consent. Anything in this Section\n12 to the contrary not withstanding, the indemnifying party shall not, without\nthe indemnified party's prior written consent, settle or compromise any claim or\nconsent to entry of any judgment in respect thereof which imposes any future\nobligation on the indemnified party or which does not include, as an\nunconditional term thereof, the giving by the claimant or the plaintiff to the\nindemnified party, a release from all liability in respect of such claim. The\n\n                                       28\n\n\n\n         indemnification required by this Section 12 shall be made by periodic\npayments of the amount thereof during the course of the investigation of\ndefense, as and when bills are received or expense, loss, damage or liability is\nincurred. The indemnity agreements contained herein shall be in addition to (a)\nany cause of action or similar right of the indemnified party against the\nindemnifying party or others, and (b) any liabilities the indemnifying party may\nbe subject to pursuant to the law.\n\n13.      MISCELLANEOUS\n\n\n         13.01. No Waiver; Cumulative Remedies. No failure or delay on the part\nof any party to this Agreement in exercising any right, power or remedy\nhereunder shall operate as a waiver thereof; nor shall any single or partial\nexercise of any such right, power or remedy preclude any other or further\nexercise thereof or the exercise of any other right, power or remedy hereunder.\nThe remedies herein provided are cumulative and not exclusive of any remedies\nprovided by law.\n\n         13.02. Amendments, Waivers and Consents. Any provision in the Agreement\nto the contrary notwithstanding, and except as hereinafter provided, changes in,\ntermination or amendments of or additions to this Agreement or any Related\nAgreement may be made, and compliance with any covenant or provision set forth\nherein may be omitted or waived, if the Company shall obtain consent thereto in\nwriting from the holder of the Note. Any waiver or consent may be given subject\nto satisfaction of conditions stated therein and any waiver or consent shall be\neffective only in the specific instance and for the specific purpose for which\ngiven.\n\n         13.03. Addresses for Notices. Any notice, demand, request, waiver or\nother communication under this Agreement or any Related Agreement shall be in\nwriting and shall be deemed to have been duly given on the date of service if\npersonally served or on the third day after mailing to the party to whom notice\nis to be given, by first class mail, registered, return receipt requested,\npostage prepaid and addressed as follows:\n\n\n     To the Company:          Mortgage.com, Inc.\n                              8751 Broward Blvd., 5th Floor\n                              Plantation, Florida 33324\n                              Attention:  Seth S. Werner\n\n     With a copy to:          Foley &amp; Lardner\n                              200 Laura Street\n                              Jacksonville, Florida 32202\n                              Attention:  Luthor F. Sadler, Esq.\n\n     To the Purchaser:        Intuit Inc.\n                              2550 Garcia Avenue\n                              Mountain View, CA 94043\n                              Attention: Kristen Brown\n\n     With a copy to:          LeBoeuf, Lamb, Greene &amp; MacRae, L.L.P.\n                              Goodwin Square\n                              225 Asylum Street\n                              Hartford, Connecticut 06103\n                              Attention: Edward A. Relly, Jr,. Esq.\n\n\n                                       29\n\n\n         13.04. Costs Expenses and Taxes. As condition precedent to the Closing,\nthe Company afrees to pay at the Closing in connection with the preparation,\nexecution and delivery of the Agreement and the issuance of the Note to be\nissued at the Closing, the reasonable fees and other out-of-pocket expenses of\nMessrs. LeBeoeuf, Lamb, Greene &amp; MacRae, L.L.P. In addition, the Company shall\npay the reasonable fees and out of pocket expenses of legal counsel, independant\npublic accountants, consultants and other outside experts retained by the\nPurchaser in connection with any amendment or waiver to this Agreement or any\nRelated Agreement by the Purchaser. In addition, the Company shall pay any and\nall stamp, or other similar taxes payable or determined to be payable in\nconnection with the execution and delivery of this Agreement, the issuance of\nthe Note and the other istruments and documents to be delivered hereunder or\nthereunder, and agrees to save the Purchaser harmless from and against any and\nall liabilities with respect to or resulting from any delay or omission to pay\nsuch taxes.\n\n         13.05. Binding Effect; Assignment. This Agreement and each Related\nAgreement to which it is a party shall be binding upon and inure to the benefit\nof each of the Company and the Purchaser and its respective heirs, successors\nand assigns, except that the Company shall not have the right to delegate its\nobligations hereunder or to assign its rights hereunder or any interest herein\nwithout the prior written consent of the holder of the Note. In addition, the\nCompany acknowledges and agrees that the Purchaser hereunder may assign all or\nany portion of its rights under the Note held by it to any other Person not\ncurrently a Purchaser hereunder. Upon any such assignment (i) the Purchaser\nshall deliver the Note held by it to the Company for cancellation and reissuance\nin the names and amounts as directed by the Purchaser, (ii) the Company, the\nPurchaser and the assignee shall enter into an amendment to this Agreement in\norder to make the assigneee a Purchaser hereunder and entitled to all the rights\nevidenced hereby and to amend Schedule 1.01 hereto to reflect such assignment\nand (iii) the Company shall cause to be issued to such assignee either a legal\nopinion in the form issued to the assigning Purchaser pursuant to Section 4.09\nof this Agreement or a letter from the issuer of such opinion stating that the\nassignee may rely on such opinion as if it were issued to assignee hereunder.\n\n\n                                       30\n\n\n\n         13.06. Survival of Representations and Warranties. All representations\nand warranties made in this Agreement, each Related Agreement, the Note, or any\nother instrument or document delivered in connection herewith or therewith,\nshall survive the execution and delivery hereof or thereof for a period of two\nyears.\n\n\n         13.07. Prior Agreements. This Agreement, each Related Agreement, and\nthe other agreements executed and delivered herewith constitute the entire\nagreement between the parties and supersedes any prior understandings or\nagreements concerning the subject matter hereof.\n\n         13.08. Severability. The provisions of this Agreement, and each Related\nAgreement are severable and, in the event that any court of competent\njurisdiction shall determine that any one or more of the provisions or part of a\nprovision contained in this Agreement, or any Related Agreement shall, for any\nreason, be held to be invalid, illegal or unenforceable in any respect, such\ninvalidity, illegality or unenforceability shall not affect any other provision\nor part of a provision of this Agreement shall be reformed and construed as if\nsuch invalid or illegal or unenforceable provision, or part of a provision, had\nnever been contained herein, and such provisions or part reformed so that it\nwould be valid, legal and enforceable to the maximum extent possible.\n\n\n         13.09. Confidentially. The Purchaser agrees that it will keep\nconfidential and will not disclose or divulge any confidential, proprietary or\nsecret information which the Purchaser may obtain from the Company pursuant to\nfinancial statements, reports and other materials submitted by the Company to\nthe Purchaser pursuant to this Agreement, or pursuant to visitation or\ninspection rights granted hereunder or under any Related Agreement, unless such\ninformation is known, or until such information becomes known, to the public;\nprovided, however, that the Purchaser may disclose such information (a) on a\nconfidential basis to their attorneys, accountants, consultants and other\nprofessionals to the extent necessary to obtain their services in connection\nwith their investment in the COmpany, (b) to any prospective purchaser of the\nNote or Shares from the Purchaser as long as such prospective purchaser agrees\nin writing to be bound by the provisions of this Section 13.09, (c) to any\nentity controlling, controlled by or under common control with the Purchaser, or\nto any partner of the Purchaser, or (d) as required by applicable law.\n\n         13.10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND\nCONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF FLORIDA, AND\nWITHOUT GIVING EFFECT TO CHOICE OF LAW PROVISIONS.\n\n         13.11. Headings. Article, section and subsection headings in this\n.Agreement are included herein for convenience of reference only and shall not\nconstitute a part of this Agreement for any other purpose.\n\n\n                                       31\n\n\n\n\n         13.12 Counterparts. This Agreement may be executed in any number of\ncounterparts, all of which taken together shall constitute one and the same\ninstrument, and any of the parties hereto may execute this Agreement by signing\nany such counterpart.\n\n         13.13. Further Assurances. From and after the date of this Agreement,\nupon the request of the Purchaser or the Company, each of the Company and the\nPurchaser shall execute and deliver such instruments, documents and other\nwritings as may be reasonably necessary or desirable to confirm and carry out\nand to effectuate fully the intent and purposes of this Agreement, each related\nAgreement and the Shares.\n\n         13.14. Waiver. At any time prior to the Closing Date, any party hereto\nmay (a) extend the time for the performance of any of the obligations or other\nacts of any other party hereto, (b) waive any inaccuracies in the\nrepresentations and warranties contained herein or in any document delivered\npursuant hereto, and (c) waive compliance with any of the agreements or\nconditions contained herein. Any agreement on the part of a party hereto to any\nsuch extension or waiver shall be valid only if set forth in an instrument in\nwriting signed by the party granting such waiver but such waiver or failure to\ninsist upon strict compliance with such obligation, covenant, agreement or\ncondition shall not operate as a waiver of, or estoppel with respect to, any\nsubsequent or future failure.\n\n         13.15. Specific Enforcement. The Purchaser and the Company acknowledge\nand agree that irreparable damage would occur in the event that any of the\nprovisions of this Agreement and each Related Agreement were not performed in\naccordance with their specific terms or were otherwise breached. It is\naccordingly agreed that the parties shall be entitled to an injunction or\ninjunctions to prevent breaches of the provisions of this Agreement, each\nRelated Agreement and to enforce specifically the terms and provisions hereof in\nany court of the United States or any state thereof having jurisdiction, this\nbeing in addition to any other remedy to which they may be entitled at law or\nequity.\n\n                            (SIGNATURE PAGE FOLLOWS)\n\n                                       32\n\n\n         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to\nbe duly executed as of the date and year first above written.\n\n\n                                              MORTGAGE.COM, INC.\n\n                                              By: \/s\/ Seth Werner\n                                                 -------------------------\n                                                 Name: Seth Werner \n                                                 Title: Chairman\/CEO\n\n\n                                              PURCHASER:\n\n                                              INTUIT INC.\n\n                                              By:\/s\/ Kristen S. Brown\n                                                 -------------------------\n                                                 Name: Kristen S. Brown\n                                                 Title:VP Business Development\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7908],"corporate_contracts_industries":[9513],"corporate_contracts_types":[9560,9567],"class_list":["post-41180","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-intuit-inc","corporate_contracts_industries-technology__software","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41180","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41180"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41180"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41180"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41180"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}