Membership Interest Purchase Agreement by and among NovaStar Financial, Inc., PipeFire, LLC, and Sellers (August 1, 2008)

 Exhibit 10.1 EXECUTION COPY MEMBERSHIP INTEREST PURCHASE AGREEMENT THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement") is made and entered into as of the 1st day of August, 2008, by and among NovaStar Financial, Inc., a Maryland corporation ("Buyer"), PipeFire, LLC, an Indiana limited liability company (the "Company"), each Person that owns any Unit or Membership Interest (as defined herein) in the Company, as set forth on Exhibit A (each, a "Direct Owner"), and each Person named on Exhibit A as the Primary Beneficial Owner of a Direct Owner (each, a "Primary Beneficial Owner"). As used in this Agreement, the term "Seller" means a Direct Owner and its related Primary Beneficial Owner, jointly and severally, and the term "Sellers" means all Direct Owners and their respective Primary Beneficial Owners, collectively. W I T N E S S E T H : WHEREAS, the Company and the Subsidiaries (as defined herein) are engaged in the business of providing appraisal management and related services to third parties and related software development activities (collectively, the "Business"); WHEREAS, the Sellers are the sole members of the Company, each holding the Membership Interest in the Company as set forth on Exhibit A; WHEREAS, the Sellers and the Company desire that the Sellers sell to Buyer, and that Buyer purchase and acquire, 75% of the outstanding Units and Membership Interests in the Company, on the terms and subject to the conditions set forth in this Agreement; WHEREAS, to give effect to the foregoing, the Parties desire to enter into this Agreement. NOW, THEREFORE, in consideration of the foregoing recitals and mutual promises made in this Agreement and the representations, warranties and covenants contained in this Agreement, and intending to be legally bound by this Agreement, the Parties agree as follows: ARTICLE 1 THE TRANSACTION 1.1 Purchase of Purchased Interest. Upon and pursuant to the terms and conditions of this Agreement, Buyer hereby purchases from each of the Sellers, and each of the Sellers hereby sells and transfers to Buyer, seventy-five percent (75%) of such Seller's Units and Membership Interest in the Company (collectively, the "Purchased Interest"), for the consideration specified below in this Article 1. The Purchased Interest includes, without limitation, seventy-five percent (75%) of the existing capital account maintained for each Seller as of the date hereof, following allocation to the Sellers of all profits and losses for all periods prior to and including the date hereof. 1.2 Payment of the Purchase Price. The aggregate purchase price (the "Purchase Price") to be paid for the Purchased Interest will be equal to the sum of the Initial Payment Amount and, if and when earned and subject to Section 5.4(b), the Second Payment Amount, the Third Payment Amount, and the Fourth Payment Amount (together, the "Subsequent Payment Amounts"), which shall be determined and paid as follows: (a) Upon execution and delivery of this Agreement by each of the Parties, Buyer is paying to Sellers, collectively, an initial aggregate purchase price amount, in cash, of $750,000 (the "Initial Payment Amount"), and all right, title and interest of Sellers in and to the Purchased Interest shall transfer to Buyer upon payment of such amount in accordance with Section 1.3. Immediately following 1 

 EXECUTION COPY such payment and transfer, the Units and Membership Interest in the Company of each Seller and the Buyer shall be as set forth on Exhibit B, and Buyer shall thereupon be admitted as a Member of the Company, without further action by any Person. (b) Within thirty (30) days after such time as the Company's monthly Pre-Tax Income for three (3) calendar months (each commencing after the date hereof) within a four (4) consecutive calendar month period is $0.01 or more, Buyer shall pay Sellers, collectively, an additional aggregate purchase price amount, in cash, of $350,000 (the "Second Payment Amount"), subject to Buyer's rights under Section 5.4(b). (c) Within thirty (30) days after such time as the Company's monthly Pre-Tax Income for three (3) calendar months (each commencing after the date hereof) within a four (4) consecutive calendar month period is $200,000 or more, Buyer shall pay Sellers, collectively, an additional aggregate purchase price amount, in cash, of $650,000 (the "Third Payment Amount"), subject to Buyer's rights under Section 5.4(b). (d) Within thirty (30) days after such time as the Company's monthly Pre-Tax Income for three (3) calendar months (each commencing after the date hereof) within a four (4) consecutive calendar month period is $400,000 or more, Buyer shall pay Sellers, collectively, an additional aggregate purchase price amount, in cash, of $2,250,000 (the "Fourth Payment Amount"), subject to Buyer's rights under Section 5.4(b). (e) Buyer and Sellers agree that each shall file, in accordance with Section 1060 of the Code, an Asset Allocation Statement on Form 8594 consistent with the allocation set forth on Exhibit C hereto with their federal income Tax Return for each Tax year that includes the date hereof and any date on which any Subsequent Payment Amount is paid. Such allocation does not represent an indication of the actual or relative amount of, and shall not be deemed to be probative with respect to, any loss or damages that may be sustained by the Company, Buyer or any Seller as a result of the breach of any provision of this Agreement or of any other agreement executed in connection herewith, including but not limited to the provisions of Section 4.4 of this Agreement. 1.3 Manner of Payment. The Initial Payment Amount and, when payable, the Subsequent Payment Amounts (subject to Section 5.4(b)) shall be paid by Buyer, by check, to each Seller in the amounts specified in Exhibit D, subject in the case of Subsequent Payments to Buyer's rights under Section 5.4(b). 1.4 Capital Accounts and Taxes. Upon payment of the Initial Payment Amount, Buyer shall succeed to seventy-five percent (75%) of the existing capital account maintained for each Seller as of the date hereof, following allocation to the Sellers of all profits and losses for all periods prior to and including the date hereof. Sellers shall remain solely responsible for the payment of all Taxes for all taxable income allocated to such Seller's capital account under the Company's operating agreement for all periods prior to and including the date hereof. 1.5 754 Election. The Parties hereby agree that the Company shall make an election under Section 754 of the Code with respect to the transaction contemplated hereby. ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE COMPANY The Company and each Seller hereby represent and warrant to Buyer as follows: 2 

 EXECUTION COPY 2.1 Organization, Qualification and Power. The Company is a limited liability company duly organized, validly existing under the laws of the State of Indiana. The Company has full power and authority to carry on the Business as currently conducted and to own and use its assets as currently used, except that the Company has not qualified to do business as a foreign limited liability company in any jurisdiction. The Company is not in default under or in violation of any provision of its articles of organization or operating agreement or any resolution adopted by the managers of the Company. 2.2 Capitalization. All of the issued and outstanding Units and Membership Interests of the Company are duly authorized, validly issued, fully paid and nonassessable, and are held of record and owned beneficially by the Direct Owners free and clear of any Taxes or Liens. The Units and relative percentage Membership Interests of each of the Direct Owners are as set forth on Exhibit A. Each Direct Owner is an Affiliate of the Person named on Exhibit A as the Primary Beneficial Owner of such Direct Owner. There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights or other agreements or commitments that could result in the issuance or sale of, or otherwise cause to become outstanding, any additional Units, Membership Interests, or other ownership, equity or capital interests of the Company. 2.3 Ownership. All of the issued and outstanding Units and Membership Interests of the Company that are held of record by a Direct Owner are owned beneficially by such Direct Owner free and clear of any Taxes or Liens, other than rights and obligations under the operating agreement of the Company and this Agreement. There are no outstanding agreements or commitments that could require the sale of any of such Units or Membership Interests of the Company. There are no voting trusts, proxies or other agreements or arrangements with respect to the voting of such Units or Membership Interests of the Company. 2.4 Subsidiaries. (a) Schedule 2.4 sets forth the name and headquarters address of each entity in which the Company directly or indirectly, through one or more other entities, owns an equity interest (each, a "Subsidiary"), and the jurisdiction in which each such Subsidiary is organized. Each Subsidiary is a duly organized and validly existing entity under the laws of the jurisdiction of its organization. Each Subsidiary has all requisite power and authority to own, lease and operate its properties and carry on its business as now conducted, except that no Subsidiary has qualified to do business as a foreign limited liability company in any jurisdiction. (b) All of the issued and outstanding equity interests of each Subsidiary are duly authorized, validly issued, fully paid and nonassessable, and are held of record and owned beneficially by the Company (or another wholly-owned Subsidiary of the Company), free and clear of any Taxes or Liens. There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights or other agreements or commitments that could result in the issuance or sale of, or otherwise cause to become outstanding, any additional ownership, equity or capital interests of any Subsidiary. (c) The Company does not own any equity interest in, or otherwise have any investment in, any entity, joint venture or association, other than the Subsidiaries. 2.5 Authority and Enforceability. The Company and each Seller has full capacity to execute, deliver and perform its or his obligations under this Agreement. The execution, delivery and performance of this Agreement by the Company and by each Direct Owner have been duly authorized by all necessary limited liability company or corporate action. This Agreement has been duly executed and delivered by the Company and each Seller and constitutes the valid and legally binding obligation of the 3 

 EXECUTION COPY Company and each Seller, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws of general application relating to or affecting creditors' rights and to general equity principles. 2.6 Noncontravention. Neither the Company nor any Seller is required to give any notice to, make any filing with or obtain any authorization, consent or approval of any Governmental Authority or Person in order to execute and deliver this Agreement or to perform such its or his obligations hereunder. Neither the execution and delivery of this Agreement by the Company or any Seller nor the consummation of the transactions contemplated by this Agreement will: (a) violate any Law to which the Company, any Subsidiary or any Seller is subject; (b) violate any provision of the articles of organization or operating agreement or other constituent documents of the Company or any Subsidiary; or (c) conflict with, result in a breach of, constitute a default under, result in the acceleration of, give any Person the right to accelerate, terminate, modify or cancel, or require any notice under, any agreement, license, permit, authorization, instrument or other arrangement to which the Company, any Subsidiary or any Seller is a party or by which the Company, any Subsidiary or any Seller is bound. 2.7 Financial Statements. The books of account and related records of the Company correctly, accurately and completely reflect all of assets and Liabilities of the Company and the Subsidiaries on a consolidated basis, except for such additional assets and Liabilities as are disclosed in Schedule 2.9 or any other Schedule to this Agreement. Attached as Schedule 2.7 are the unaudited balance sheet and unaudited statement of income of the Company and the Subsidiaries as of and for the fiscal year ended December 31, 2007 and the unaudited balance sheet and statement of income of the Company and the Subsidiaries as of and for the six months ended June 30, 2008 (each a "Financial Statement" and collectively the "Financial Statements"). Each Financial Statement: (x) has been prepared based on, and in accordance with, the books of account and related records of the Company, and (y) correctly, accurately and completely presents the financial condition, financial position, results of operations, assets and Liabilities of the Company and the Subsidiaries for the periods covered. 2.8 Absence of Changes. Except as disclosed on Schedule 2.8, since June 30, 2008, the Company has not made any distributions or other payments to Sellers in respect of their Membership Interests and has not made any other payments to any Seller or any Affiliate of a Seller other than in the ordinary course of business consistent with past practice. Since December 31, 2007, the Business has been operated in the ordinary course consistent with past practice, and there has been no event or occurrence which has caused or could reasonably be expected to cause a Material Adverse Effect. Since December 31, 2007, except as disclosed in Schedule 2.8, there has not been: (a) any sale, lease, transfer, assignment or other disposition by the Company or any Subsidiary of any of its assets or properties other than for fair consideration in the ordinary course of business consistent with past practice, or any disposition or loss of use by the Company or any Subsidiary of any Intellectual Property; (b) any agreement, lease, license or other arrangement (or series of related agreements, leases, licenses or other arrangements) entered into by the Company or any Subsidiary other than in the ordinary course of business consistent with past practice; (c) any acceleration, termination, modification or cancellation by any Person (including the Company or any Subsidiary) of any agreement, lease, license or other arrangement to which the Company or any Subsidiary is a party; 4 

 EXECUTION COPY (d) any note, bond or other debt security issued or any indebtedness for borrowed money or capitalized lease obligation created, incurred, assumed or guaranteed by the Company or any Subsidiary, other than guarantees by the Company of obligations of one or more of the Subsidiaries; (e) any cancellation, compromise, waiver or release of any right or claim by the Company or any Subsidiary; (f) any increase in the compensation of, or any payment of bonus compensation to, any of the members, officers or employees of the Company or of any Subsidiary; any adoption of, amendment or modification to or termination of any Employee Benefit Plan or other plan, agreement, commitment or arrangement for the benefit of any of the directors, officers or employees of the Company or of any Subsidiary; or any other change by the Company or any Subsidiary in the employment terms for any of their respective directors, officers or employees; (g) any change by the Company or any Subsidiary in its accounting methods, principles or practices; (h) any tax election by the Company or any Subsidiary outside the ordinary course of business or inconsistent with past practice; or (i) any occurrence, event, incident, action, failure to take action or transaction involving the Company or any Subsidiary that has had or is reasonably likely to have a Material Adverse Effect. 2.9 Undisclosed Liabilities. Except as set forth on Schedule 2.9, neither the Company nor any Subsidiary has any Liability, except for: (a) Liabilities set forth in the June 30, 2008 balance sheet included in the Financial Statements; and (b) Liabilities incurred since June 30, 2008 in the ordinary course of business consistent in nature with those reflected in the Financial Statements. 2.10 Claims. There are no actions, suits, proceedings, hearings, investigations, charges, complaints, claims or demands of any kind pending or, to the Knowledge of the Sellers, threatened against or affecting the Company or any Subsidiary and, to the Knowledge of Sellers, there is no reasonable basis for any of the foregoing. There are no actions, suits, proceedings, hearings, investigations, charges, complaints, claims or demands of any kind pending or, to the Knowledge of the Sellers, threatened against or affecting any Seller that would be reasonably likely to affect the Company, any Subsidiary or any aspect of the Business, and, to the Knowledge of Sellers, there is no reasonable basis for any of the foregoing. 2.11 Legal Compliance. Except for failure by the Company and each Subsidiary to qualify to do business as a foreign limited liability company in any jurisdiction, and except as disclosed on Schedule 2.11: (a) the Company and each Subsidiary has complied and is currently in compliance with each applicable Law; and (b) the Company and each Subsidiary has obtained all franchises, approvals, permits, licenses, orders, registrations, certificates, variances or similar rights required to conduct the Business or maintain its assets, and such franchises, approvals, permits, licenses, orders, registrations, certificates, variances or similar rights are current and have not been revoked, suspended, canceled or terminated, nor has notice been given of any threatened revocation, suspension, cancellation, termination or non-renewal. 2.12 Title to Assets. The Company or a Subsidiary has good and marketable title to the assets identified as the Company's or such Subsidiary's assets in the Financial Statements, free and clear of all Liens. The Company or a Subsidiary has a valid leasehold interest in, or license or other contractual right to use, all other assets used by the Company or such Subsidiary in the conduct of the Business. 5 

 EXECUTION COPY 2.13 Real Property. Neither the Company nor any Subsidiary currently owns, and none of them has ever owned, any real property. Schedule 2.13 lists each lease of real property to which the Company or any Subsidiary is a party or by which any of them is bound. Correct and complete copies of such leases, as amended to date, have been provided to Buyer. Each such lease is valid, binding, enforceable and in full force and effect, and neither the Company nor any Subsidiary nor, to the Knowledge of Sellers, any other party, is in default of any material obligation under any such lease. 2.14 Intellectual Property. The Company or a Subsidiary owns all right, title and interest in and to (free and clear of all Liens), or has the right to use pursuant to a valid and enforceable license, sublicense, agreement or permission, all Intellectual Property used in or necessary to the operation of the Business. Neither the Company nor any Subsidiary has interfered with, infringed upon, misappropriated, or otherwise violated any Intellectual Property rights of any other Person, and neither the Company nor any Subsidiary has ever received any charge, complaint, claim, demand or notice alleging any such interference, infringement, misappropriation or violation. To the Knowledge of Sellers, no other Person has interfered with, infringed upon, misappropriated or otherwise conflicted with any Intellectual Property rights of the Company or of any Subsidiary. 2.15 Contracts. (a) Neither the Company nor any Subsidiary is a party to or bound by any agreement that purports to restrict the freedom of the Company or any Subsidiary to engage in any line of business or to compete with any person. (b) The Company has delivered to Buyer a correct and complete copy of each written Material Contract, as amended to date, and a written summary setting forth the terms and conditions of each oral Material Contract. With respect to each Material Contract: (i) the Material Contract is legal, valid, binding and enforceable and in full force and effect; (ii) the Material Contract will continue to be legal, valid, binding, enforceable and in full force and effect on identical terms following the consummation of the transactions contemplated by this Agreement; (iii) no party is in breach or default, and no event has occurred which with notice or lapse of time would constitute a breach or default, or permit termination, modification or acceleration, under the Material Contract; and (iv) no Person has repudiated any provision of the Material Contract. As used herein, the term "Material Contract" means: (i) any agreement (or group of related agreements) for the purchase, sale, lease or license of goods or services that is reasonably likely to involve payments to or by the Company or any Subsidiary in excess of $10,000.00; (ii) any agreement concerning a partnership, joint venture or other business arrangement with any Person; (iii) any agreement (or group of related agreements) under which (A) any indebtedness for borrowed money or capitalized lease obligation has been created, incurred, assumed or guaranteed, or (B) any Lien has been granted or imposed on any assets or properties of the Company or of any Subsidiary; (iv) any license, sublicense, agreement or permission pursuant to which an item of Intellectual Property is used; (v) any agreement under which a default (whether by the Company, a Subsidiary, or any third party) would reasonably be expected to have a Material Adverse Effect; and 6 

 EXECUTION COPY (vi) any agreement for the provision of goods or services by the Company or any Subsidiary outside the ordinary course of business. 2.16 Employment Matters. (a) Set forth on Schedule 2.16(a) is a complete and accurate list of the following information for each employee of the Company or of any Subsidiary, including each employee on leave of absence or layoff status: name, job title, date of hire (or if different, date of commencement of employment), current compensation paid or payable and any change in compensation during the last 12 months. (b) All employees of the Company or of any Subsidiary are employed on an at-will basis and, except as set forth on Schedule 2.16(b), neither the Company nor any Subsidiary is a party to or bound by any agreement with any person relating to employment, including but not limited to any agreement specifying a length of employment, base or bonus compensation, severance benefits, or other terms of employment. (c) Neither the Company nor any Subsidiary has any outstanding obligations to any former employee. (d) The execution, delivery and performance of this Agreement will not trigger any severance, bonus or other payment obligations to any employee of the Company or of any Subsidiary under any contract, Employee Benefit Plan, or otherwise, except for payment of the Purchase Price hereunder to employees who are also Sellers. (e) Neither the Company nor any Subsidiary is a party to or bound by any collective bargaining agreement, and none of them have experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes. Neither the Company nor any Subsidiary has committed any unfair labor practice. There are no complaints against the Company or any Subsidiary pending or threatened before the National Labor Relations Board, any similar state, or local labor agencies, or before the Equal Employment Commission or any similar state or local agency, by or on behalf of any employee or former employee of the Company or of any Subsidiary. (f) Except as disclosed on Schedule 2.16(f), the Company, each Subsidiary, and PipeFire Management LLC has complied with all Laws relating to employment. 2.17 Employee Benefits. (a) Set forth on Schedule 2.17 is a true and complete list of each retirement, pension, profit sharing, deferred compensation, stock purchase, stock option, incentive, bonus, severance, retirement, health, welfare, fringe benefit, or other plan, contract, commitment or arrangement for the benefit of the current or former directors, officers or employees of the Company, any Subsidiary, or PipeFire Management LLC, or any of their respective dependents, survivors or beneficiaries, that is sponsored, maintained or contributed to by the Company, any Subsidiary, or PipeFire Management LLC, or with respect to which the Company, any Subsidiary, or PipeFire Management LLC could incur Liability under ERISA or the Code (each, an "Employee Benefit Plan"). Each Employee Benefit Plan complies in form and in operation in all material respects with the applicable requirements of any Law, including ERISA, Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the Code. No payment pursuant to any Employee Benefit Plan that is owed or may become due to any officer, director or agent of the Company or any employee will be non-deductible to the Company or subject to any Taxes under Sections 280G or 4999 of the Code. 7 

 EXECUTION COPY (b) The Company has delivered to Buyer correct, accurate and complete copies of: (i) all documents evidencing each of the Employee Benefit Plans, as amended, including the plan document and summary plan description (or correct, accurate and complete written summaries of the Employee Benefit Plans to the extent not evidenced by such documents); (ii) all documents evidencing trusts relating to the Employee Benefit Plans, as amended; (iii) all documents evidencing any agreements or arrangements with service providers relating to the Employee Benefit Plans (or correct, accurate and complete written summaries of such service provider agreements or arrangements); (iv) where applicable, the last filed Form 5500 or 5500 C with respect to each the Employee Benefit Plan; (v) if applicable, the audit report of each the Employee Benefit Plan; and (vi) all schedules and exhibits to all such documents listed in subsections (i)-(v). All Forms 5500 or 5500 C required to be filed for any Employee Benefit Plan have been timely filed. (c) Each Employee Benefit Plan that is intended to qualify under Sections 401(a) or 501(a) of the Code has received a favorable determination letter or, if applicable, is relying on a favorable determination letter or similar letter received by the prototype plan sponsor, and the related trusts have been determined to be exempt from taxation. Nothing has occurred since the date of such determination letter that would cause the loss of such qualification or exemption, and no assessment of any Taxes has been made or, to the Knowledge of the Sellers, is threatened against the Company, any Subsidiary, PipeFire Management LLC or any related trust of any Employee Benefit Plan on the basis of a failure of such qualification or exemption. The consummation of the transactions contemplated by this Agreement shall not result in the payment, vesting or acceleration of any benefit under any Employee Benefit Plan. (d) No Employee Benefit Plan is subject to Title IV of ERISA or a "multiemployer plan" within the meaning set forth in Section 3(37) of ERISA. (e) No Employee Benefit Plan that is an "employee welfare benefit plan" within the meaning set forth in Section 3(1) of ERISA provides or promises post retirement health or life benefits to current employees or retirees of the Company or of any Subsidiary beyond their retirement date or other termination of service, except as required by applicable Law. (f) All contributions and premiums which are due under the terms of or in respect of each Employee Benefit Plan have been made or paid by the due date thereof. (g) With respect to the Employee Benefit Plans, no event has occurred, and there exists no condition or set of circumstances, in connection with which the Company, any Subsidiary, or PipeFire Management LLC could be subject to any Liability (other than for routine claims for benefits in the ordinary course) under the terms of the Employee Benefit Plans, ERISA, the Code or any other applicable Law. To the Knowledge of the Sellers, none of the Employee Benefit Plans are under investigation or audit by the Internal Revenue Service or the U.S. Department of Labor. No legal action, suit or claim is pending or, to the Knowledge of the Sellers, threatened, with respect to any Employee Benefit Plan (other than routine claims for benefits in the ordinary course) and no fact exists which could reasonably be expected to give rise to any such action, suit or claim. (h) No "prohibited transaction," as such term is defined in Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Employee Benefit Plan. 2.18 Insurance. (a) The Company has delivered to Buyer accurate and complete copies of all policies of insurance, including insurance providing benefits for employees (and correspondence relating to coverage thereunder), providing coverage to the Company or any Subsidiary. All policies of insurance 8 

 EXECUTION COPY that provide coverage to the Company or any Subsidiary: (i) are valid, outstanding and enforceable, and no party thereto is in default, breach or violation of any obligations or conditions thereunder; (ii) are issued by an insurer that is financially sound; and (iii) taken together, provide insurance coverage in scope and amount customary and reasonable for the Business. (b) Neither the Company nor any Subsidiary has received (i) any refusal of coverage or any notice that a defense will be afforded with reservation of rights, or (ii) any notice of cancellation or non-renewal any other indication that any policy of insurance is no longer in full force or effect or that the issuer of any policy of insurance is not willing or able to perform its obligations thereunder. 2.19 Taxes. (a) The Company and each Subsidiary has: (i) timely and duly filed all Tax returns that the Company or such Subsidiary is required to file (the "Tax Returns"), each of which was accurate and complete in all material respects; (ii) timely paid all Taxes that have become due and payable, except such as are being contested in good faith by appropriate proceedings (to the extent that any such proceedings are required) and with respect to which the Company is maintaining reserves or accruals in its Financial Statements in an amount equal to the Taxes being contested; (iii) withheld or collected all Taxes that the Company or such Subsidiary was required to withhold or collect, and to the extent required, paid such Taxes to the proper Governmental Authority; and (iv) maintained accruals and reserves in its Financial Statements which are in all respects adequate to cover all Liabilities of the Company and any Subsidiary for Taxes. (b) No claim has been made by Governmental Authority in a jurisdiction where the Company does not file Tax Returns that the Company or any Subsidiary is or may be subject to taxation in that jurisdiction. The failure prior to the date hereof by the Company or any Subsidiary to qualify to do business as a foreign limited liability company in any jurisdiction will not give rise to any liability for Taxes for any period prior to the date hereof. (c) No extension of time has been requested or granted with respect to the filing of any Tax Returns. No Tax Return has ever been audited by Governmental Authority and there are no pending or, to the Knowledge of the Sellers, threatened, actions, suits, proceedings, disputes, investigations, audits, charges, claims or demands of any kind relating to Taxes or any Tax Returns of the Company or of any Subsidiary. Neither the Company nor any Subsidiary has granted or been requested to grant any waiver of any statute of limitations with respect to, or any extension of a period for the assessment of, any Tax. (d) There is no tax sharing agreement, tax allocation agreement, tax indemnity obligation or similar written or unwritten agreement, arrangement, understanding or practice with respect to Taxes to which the Company or any Subsidiary is a party of by which any of them is bound. 2.20 Related Party Transactions. Except as set forth on Schedule 2.20, no Seller, nor any Affiliate of a Seller, nor any employee, director, officer, or other representative of the Company or of any Subsidiary, nor any family member of any of the foregoing, nor any entity in which any of the foregoing has a financial interest (other than passive investments in publicly traded securities): (a) is a party to any agreement or other form of transaction or arrangement with the Company or any Subsidiary (other than the Company's operating agreement, and other than employment arrangements that are otherwise disclosed under this Agreement), including, but not limited to, any loan or any lease or license of any property or assets; (b) has an interest in any property or assets used by or in connection with any aspect of 9 

 EXECUTION COPY the Business; or (c) is engaged in competition with the Company or any Subsidiary with respect to any of the products or services of the Company or of any Subsidiary in any market. 2.21 Other Interests. Except as set forth on Schedule 2.21, no Seller nor any Affiliate of a Seller is an employee, manager, director, officer, or other representative of, or holds a financial interest (other than passive investments in publicly traded securities) in, any Person engaged in any business related to the arranging, brokering, funding, closing, refinancing, or buying and selling of residential or commercial real estate or residential or commercial real estate loans, including but not limited to any real estate agency or brokerage, mortgage broker or lender, title insurer, real estate appraisal company, closing services provider, or manager of any of the foregoing. The foregoing does not apply to investments by a Seller or an Affiliate of a Seller in real estate, or in Persons that invest in real estate, in each case for such Seller's (or its Affiliate's) own account. 2.22 Brokers. No finder, broker, agent, or other intermediary acting on behalf of the Company or any Subsidiary or Seller or Affiliate of a Seller is entitled to a commission, fee, or other compensation in connection with the negotiation or consummation of this Agreement or any of the transactions contemplated hereby. 2.23 Full Disclosure. No representation, warranty, covenant or agreement made by the Company or the Sellers in this Agreement or in the exhibits or schedules hereto contains any false or misleading statement of a material fact, or omits any material fact required to be stated therein or necessary in order to make the statements therein not false or misleading. 2.24 No Other Representations or Warranties. In entering into this Agreement, each of the parties acknowledges that except for the representations and warranties made by the parties in this Agreement and in the exhibits and schedules hereto, no party nor any of their respective directors, officers, employees, agents or representatives, makes or has made any representation or warranty, either express or implied to any other party or to any of their respective Affiliates, directors, officers, employees, agents or representatives. 2.25 Cross Disclosure. If Sellers or Company make disclosure under a Schedule to this Agreement, the parties shall deem that disclosure made in each instance where it would be required under this Article 2, to the extent that the relevance of such disclosure to such other instances is reasonably apparent from such disclosure. ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF BUYER Buyer hereby represents and warrants to the Company and the Sellers as follows: 3.1 Organization and Good Standing. Buyer is a corporation duly formed, validly existing and in good standing under the laws of the State of Maryland. 3.2 Authority and Enforceability. Buyer has full power and authority to execute, deliver and perform this Agreement, and the execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary corporate action. This Agreement has been duly executed and delivered by Buyer and constitutes the valid and legally binding obligation of Buyer, enforceable in accordance with its terms. Buyer is not required to give any notice to, make any filing with or obtain any authorization, consent or approval of any Governmental Authority or Person in order for the parties to consummate the transactions contemplated by this Agreement. 10 

 EXECUTION COPY 3.3 Noncontravention. Neither the execution or delivery of this Agreement, nor the consummation of the transactions contemplated by this Agreement, will: (a) violate any Law to which Buyer is subject; (b) violate any provision of the certificate of incorporation or bylaws of Buyer or any resolution adopted by the board of directors or shareholders of Buyer; or (c) conflict with, result in a breach of, constitute a default under, result in the acceleration of, give any Person the right to accelerate, terminate, modify or cancel, or require any notice under, any material agreement, license, permit, authorization, instrument or other arrangement to which Buyer is a party or by which Buyer is bound or to which its assets are subject (or result in the imposition of any Lien upon any of its assets). 3.4 Brokers. No finder, broker, agent, or other intermediary acting on behalf of Buyer is entitled to a commission, fee, or other compensation in connection with the negotiation or consummation of this Agreement or any of the transactions contemplated hereby. 3.5 Investment; Securities Laws. (a) Buyer represents that Buyer is acquiring the Purchased Interest for its own account, not as nominee or agent for any other Person and not with a view to the resale or distribution of any part thereof within the meaning of the Securities Act or any applicable blue sky or state securities law, and Buyer has no present intention of selling or granting any participation in or otherwise distributing all or a portion of the same, except as expressly provided in the Amended Operating Agreement. (b) Buyer represents that it understands that the Purchased Interest has not been and will not be registered under the Securities Act or under any applicable blue sky or state securities laws, and that the Purchased Interest must be held indefinitely unless the Purchased Interest is subsequently registered under the Securities Act and all applicable blue sky or state securities laws or an exemption from such registration is available. ARTICLE 4 ADDITIONAL AGREEMENTS 4.1 Amendment of Constituent Documents. Effective upon the execution and delivery of this Agreement by each Party: (a) The Company's Articles of Organization are hereby amended and restated in their entirety in the form attached hereto as Exhibit E (the "Amended Articles"), and the Company shall execute the Amended Articles, file such Amended Articles with the Secretary of State of the State of Indiana, and otherwise take all actions necessary to give effect thereto. (b) The Company's operating agreement is hereby amended and restated in its entirety in the form attached hereto as Exhibit F (the "Amended Operating Agreement"), and the Company, each Seller and Buyer shall execute and deliver the same and otherwise take all actions necessary to give effect thereto. 4.2 Additional Agreements. Effective upon the execution and delivery of this Agreement by each Party, the Company is entering into an employment agreement with each Primary Beneficial Owner and with Steve Haslam, in the form attached hereto as Exhibits G-1 through G-8, and Buyer and the Company are entering into a Revolving Credit Agreement in the form attached hereto as Exhibit H and an Administrative Services Agreement in the form attached hereto as Exhibit I. Buyer, the Company and each Seller, in all capacities (including as Members of the Company) hereby authorize and approve the execution, delivery and performance by the Company of each of the foregoing. 11 

 EXECUTION COPY 4.3 Intellectual Property Transfers. Each Seller hereby irrevocably sells, grants, conveys, assigns and delivers unto the Company, its successors and assigns, all of such Seller's right, title and interest (if any), throughout the world, in and to the Inventions, all prior and derivative works relating to the Inventions, all actions and causes of action relating to the Inventions, and all profits, damages, penalties and other recoveries related to any of the foregoing. As used herein, the term "Inventions" means any and all inventions, technological innovations, modifications, discoveries, designs, developments, improvements, processes, programs, formulas, data, techniques, methods, know-how, ideas, creations, secrets and any other intellectual property rights whatsoever including any and all interests (whether or not patentable or registrable under copyright or similar statutes or subject to analogous protection) and improvements to all such properties that such Seller (either alone or with others) has made, conceived, discovered, created, developed, invented, produced, reduced to practice or possesses that, in case of any of the foregoing, relate to or are used in connection with the Business or any of the products or services being developed, provided or sold by the Company or any Subsidiary. Each Seller covenants that, when requested, such Seller will, without charge to the Company, its successors and assigns, but without out-of-pocket expense of such Seller, execute all documents and take all such further actions as may be reasonably necessary, desirable or convenient to enable the Company and its successors and assigns to obtain, maintain and enforce, in any and all countries, its intellectual property rights and interests in the matters herein assigned to the Company. 4.4 Noncompetition and Nonsolicitation. (a) In partial consideration of Buyer's payment of the Purchase Price to Sellers and the consummation of the transactions contemplated by this Agreement, and without in any way limiting any other agreement between any Person and the Company or any of its Affiliates, each Seller hereby agrees, subject to Section 4.4(b) hereof, that such Seller shall not, for a period of five (5) years after the date of this Agreement, directly or indirectly (other than through and for the benefit of the Company and its Subsidiaries): (i) engage, anywhere in the United States, in the Business (other than passive investments in publicly traded securities) individually or through any Person; provided, however, that the foregoing shall not prohibit any Seller, other than the Majority Seller, from performing (but not procuring, coordinating, or otherwise managing) appraisals as a licensed appraiser; (ii) solicit, for any Seller or any other Person, business from any customers, clients or accounts of the Company or of any Subsidiary, or encourage, in any way or for any reason, any customer, client or account of the Business, to sever or alter the relationship of such customer, client or account with the Business; or (iii) solicit, employ, retain as a consultant, interfere with or attempt to entice away from the Company or any Subsidiary any employee of the Company or of any Subsidiary, during such employment and for a period of six (6) months thereafter. (b) Notwithstanding the foregoing, the parties agree that the restrictions set forth in clauses (i) and (ii) of Section 4.4(a) shall cease to be applicable to a Seller, other than the Majority Seller, upon the later to occur of: (i) the termination of such Seller's employment with the Company and its Subsidiaries and of any right to severance compensation from the Company or any of its Subsidiaries, and (ii) the date on which the Company acquires such Seller's entire equity interest in the Company or such Seller otherwise disposes of such Seller's entire equity interest in the Company pursuant to a transaction permitted by the Amended Operating Agreement; provided, however, that if such Seller's employment with the Company is terminated either by the Company for "cause" or by such Seller without "good reason" (as such terms are defined in the employment agreement between the Company and such Seller), 12 

 EXECUTION COPY the restrictions set forth in clauses (i) and (ii) of Section 4.4(a) shall not cease to be applicable to such Seller prior to the first anniversary of the date of such termination of employment. (c) The Parties acknowledge and agree that the provisions of this Section 4.4 are an essential part of the agreed upon exchange of consideration, and that the geographic boundaries, scope of prohibited activities, and the time duration of the provisions of this Section 4.4 are reasonable and are no broader than are necessary to protect the legitimate business interests of Buyer. In furtherance of, and not in derogation of the provisions of this Section 4.4, if any provision contained in this Section 4.4 is held by any court or arbitrator of competent jurisdiction to be unenforceable because of the duration of such provision, the geographic area covered thereby or otherwise, the court or arbitrator making such determination shall have the power to, and is hereby directed by the Parties to, reduce the duration or geographic area of such provision or otherwise modify such provision, and, in its reduced or modified form, such provision shall be enforceable. If any provision of this Section 4.4 should be held invalid, illegal or unenforceable in any respect in any jurisdiction, then, to the fullest extent permitted by law, (i) all other provisions of this Section 4.4 shall remain in full force and effect in such jurisdiction and shall be construed in order to carry out the intentions of the Parties as nearly as may be possible, and (ii) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. 4.5 Further Assurances. In case at any time after the date hereof any further action is necessary or desirable to carry out the purposes of this Agreement, each of the Parties shall take such further action (including the execution and delivery of such further instruments and documents) as any other Party reasonably may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefor under Article 5). ARTICLE 5 INDEMNIFICATION 5.1 Indemnification Obligations. (a) The Company and the Sellers shall jointly and severally indemnify Buyer and hold Buyer harmless from and against any and all Adverse Consequences arising out of or resulting from (A) any misrepresentation or breach of any representation, warranty, covenant or agreement made by the Company or any Sellers in this Agreement or in any statement, certificate, instrument or other document or item furnished or delivered or to be furnished or delivered by the Company or any Seller to Buyer in connection with the transactions contemplated by this Agreement, and (B) any failure by the Company, any Subsidiary or PipeFire Management LLC to maintain workers compensation insurance in accordance with applicable law. Notwithstanding the foregoing: (i) Buyer shall not be entitled to indemnification under this Section (other than with respect to a breach of Section 4.4) unless the aggregate monetary amount of all Adverse Consequences for which Buyer would, in the absence of this sentence, be entitled to receive indemnification under this Section exceeds an amount equal to $10,000 (the "Threshold"), and then Buyer shall be entitled to indemnification for only such amounts that, in the aggregate, exceed the Threshold; and (ii) the aggregate indemnification obligations of Sellers collectively under this Article 5 (other than with respect to a breach of Section 4.4) shall not exceed one-hundred percent (100%) of the Purchase Price. (b) Buyer shall indemnify the Company and each Seller and hold the Company and each Seller harmless from and against any and all Adverse Consequences arising out of or resulting from any misrepresentation or breach of any representation, warranty, covenant or agreement made by Buyer in this Agreement or in any statement, certificate, instrument or other document or item furnished or delivered or to be furnished or delivered by Buyer to the Company or any Seller in connection with the 13 

 EXECUTION COPY transactions contemplated by this Agreement. Notwithstanding the foregoing, except with respect to a failure to pay any Subsequent Payment Amount: (i) the Company and Sellers shall not be entitled to indemnification under this Section unless the aggregate monetary amount of all Adverse Consequences for which the Company and Sellers would, in the absence of this sentence, be entitled to receive indemnification under this Section exceeds the Threshold, and then the Company and Sellers shall be entitled to indemnification for only such amounts that, in the aggregate, exceed the Threshold; and (ii) the aggregate indemnification obligations of Buyer under this Article 5 shall not exceed one-hundred percent (100%) of the Purchase Price. 5.2 Limitation on Liability of Individual Sellers; Security Interest. (a) Any liability of a Direct Owner and its related Primary Beneficial Owner shall be joint and several. Any liability of the Sellers under this Article 5 shall otherwise be several but not joint, and shall be apportioned to the Sellers on a pro rata basis according to their respective Membership Interests immediately prior to the transactions contemplated by this Agreement, as set forth in Exhibit C; provided, however, that the Majority Seller shall be jointly and severally liable for all liabilities of the Company and the Sellers hereunder. (b) Each Seller hereby pledges and grants to Buyer a first priority perfected security interest in the Units and Membership Interests of such Seller and all distributions thereon and proceeds thereof, to secure the obligations of such Seller hereunder. Without limiting any other rights, in the event that any Seller fails to pay to Buyer, when due, the amount of any Claim hereunder that such Seller is obligated to pay to Buyer, the Company hereby agrees to pay to Buyer, any and all distributions that otherwise would be made with respect to such Units and Membership Interests to such Seller, and to otherwise comply with written instructions of Buyer without further consent of any Person, until such liability to Buyer is satisfied in full. Each Seller and the Company shall take such actions and deliver such further instruments and documents as Buyer may from time to time request to perfect and otherwise give effect to the security interest granted hereby. 5.3 Indemnification Procedures. (a) All representations and warranties contained in this Agreement or any statement, certificate, instrument or other document or item delivered or to be delivered pursuant to this Agreement or in connection with the transactions contemplated by this Agreement shall survive the consummation of the transactions contemplated by this Agreement. (b) A Party seeking indemnification pursuant to this Article 5 (an "Indemnified Party") shall give notice to the Party from whom such indemnification is sought (the "Indemnifying Party") of any claim for which it is seeking indemnity under this Article 5 (a "Claim"), but failure to give such notice shall not relieve the Indemnifying Party of any Liability hereunder (except to the extent that the Indemnifying Party has suffered actual prejudice thereby). (c) An Indemnifying Party will have the right to defend the Indemnified Party against any third party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party so long as (i) the Indemnifying Party notifies the Indemnified Party, in writing, that the Indemnifying Party will defend the Indemnified Party against the Claim, (ii) the Claim involves only monetary damages and does not seek an injunction or other equitable relief, (iii) the Indemnifying Party confirms in writing that such Claim is subject to indemnification by the Indemnifying Party hereunder, and provides to the Indemnified Party reasonable assurances that the Indemnifying Party has the financial ability to satisfy the Claim, and (iv) the Indemnifying Party conducts the defense of the Claim in a diligent manner. 14 

 EXECUTION COPY (d) So long as the Indemnifying Party is conducting the defense of the Claim in accordance with Section 6.2(c), (i) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Claim, (ii) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Claim without the prior written consent of the Indemnifying Party (which consent shall not be withheld or delayed unreasonably), and (iii) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Claim without the prior written consent of the Indemnified Party (which consent shall not be withheld or delayed unreasonably). (e) In the event any of the conditions set forth in Section 6.2(c) is or becomes unsatisfied, (i) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to the Claim (and the Indemnified Party need not consult with, or obtain any consent from, the Indemnifying Party), (ii) the Indemnifying Party will reimburse the Indemnified Party promptly and periodically for the costs of defending against the Claim (including reasonable attorneys' fees and expenses), and (iii) the Indemnifying Party will remain responsible for any Adverse Consequences the Indemnified Party may suffer resulting from or arising out of the Claim. (f) For purposes of this Article 5, including the determination of Claims by any Indemnified Party, any and all references to a "Material Adverse Effect" or "material" limitations or limitations as to "Knowledge", while being taken into account for purposes of determining whether a Claim for Adverse Consequences exists, shall be disregarded for purposes of calculating the amount of said Claim. For purposes of calculating the monetary amount of Adverse Consequences for which any Claim may be made, a credit will be given to the extent of any insurance recovery, recovery from any other party alleged to be responsible therefor, or Tax benefit received by the Indemnified Party, in respect of such Adverse Consequences. Each Indemnified Party shall use its best efforts to collect any amounts available under such insurance coverage and from such other party alleged to have responsibility and to realize any Tax benefit with respect to any Adverse Consequences. If the amount to be netted hereunder from any payment required under Sections 5.1(a) or 5.1(b) is received after payment by the Indemnifying Party of any amount otherwise required to be paid to an Indemnified Party pursuant to this Article 5, the Indemnified Party shall repay to the Indemnifying Party, promptly after receipt, any amount that the Indemnifying Party would not have had to pay pursuant to this Article 5 had such determination been made at the time of such payment. (g) Each Indemnified Party shall be obligated to use its commercially reasonable efforts to mitigate the monetary amount of any Adverse Consequences for which it is entitled to seek indemnification hereunder, and an indemnifying party shall not be required to make any payment to an Indemnified Party in respect of such Adverse Consequences to the extent that such payment would have been avoided had such Indemnified Party not failed to comply with the foregoing obligation. (h) The indemnities provided for in Sections 5.1(a) and 5.1(b) hereof shall be the exclusive remedies of the parties to this Agreement and their respective officers, directors, employees, Affiliates, agents, consultants, representatives, successors and assigns for any breach of or inaccuracy in any representation or warranty or any breach, non-fulfillment or default in the performance of any of the covenants or agreements contained in this Agreement, and the parties shall not be entitled to a rescission of this Agreement or to any further indemnification rights or claims of any nature whatsoever in respect thereof, all of which the parties hereto hereby waive; provided, however, that the limitations of this Section shall not apply in the case of fraud or to any breach, non-fulfillment or default in the performance of any of the covenants or agreements contained in Article 4 of this Agreement; provided, further, that nothing herein shall limit the rights of any party to seek specific performance or injunctive or other non-monetary equitable relief. 15 

 EXECUTION COPY (i) Any liability for indemnification under this Article 5 shall be determined without duplication of recovery by reason of the state of facts giving rise to such liability constituting a breach of more than one representation, warranty, covenant or agreement. (j) Upon making any indemnification payment pursuant to this Article 5, the Indemnifying Party will, to the extent of such payment, be subrogated to all rights of the Indemnified Party against any unaffiliated third party in respect of the Adverse Consequences to which the payment relates; provided, however, that until the Indemnified Party recovers full payment of its Adverse Consequences, any and all claims of the Indemnifying Party against any such unaffiliated third party on account of said payment are hereby made expressly subordinated and subjected in right of payment to the Indemnified Party's rights against such third party. Without limiting the generality of any other provision hereof, each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation and subordination rights. (k) Notwithstanding anything herein to the contrary, the representations and warranties under this Agreement shall survive until the date that is eighteen (18) months following the date of this Agreement, and no action or claim for Adverse Consequences resulting from any misrepresentation or breach of warranty shall be brought or made thereafter; provided, however, that (i) any of the representations and warranties contained in Sections 2.2, 2.3, 2.4, 2.5, 2.19, 2.20, 2.22, 3.1, 3.2 and 3.4 shall survive indefinitely; and (ii) any claims which has been properly asserted pursuant to Section 5.1 prior to the expiration of the survival period, shall survive until such claim is finally resolved and satisfied. The covenants contained in this Agreement shall survive the Closing indefinitely. 5.4 Determination and Payment of Claims. (a) After the giving of any Claim Notice pursuant hereto, the amount of any Claim for which an Indemnified Party shall be entitled to indemnification under this Article 5 shall be determined: (i) by the written agreement between the Indemnified Party and the Indemnifying Party; (ii) by a judgment or decree of any court of competent jurisdiction; or (iii) by any other means to which the Indemnified Party and the Indemnifying Party shall agree. All amounts due to the Indemnified Party as so finally determined shall be paid within five (5) days after such final determination. (b) All payments made by Seller to any Indemnified Party pursuant to Section 9.1(b) shall be treated as an adjustment to the Purchase Price. The aggregate amount of any and all Claims payable to Buyer may be recouped and set-off by Buyer against any Subsequent Payment Amount hereunder, without limiting any other rights or remedies of Buyer. In the event that the amount of any Claim made by Buyer prior to the date on which any Subsequent Payment Amount would otherwise be due and payable remains unresolved on such date, Buyer shall be entitled to withhold from such Subsequent Payment Amount an amount equal to the aggregate amount of all such unresolved Claims, and to recoup and set-off against such withheld amounts the full amount of such Claims as finally determined pursuant to Section 5.4(a), without interest. In the event that the aggregate amount of all such Claims are finally determined pursuant to Section 5.4(a) to be less than the amount of the Subsequent Payment Amounts so withheld by Buyer, Buyer shall pay the difference to Sellers within five (5) Business Days after such final determination. ARTICLE 6 MISCELLANEOUS 6.1 Publicity. From the date of this Agreement, neither Buyer, on the one hand, nor the Company or any Seller, on the other hand, shall, without the written approval of the other, make any press 16 

 EXECUTION COPY release or other public announcement concerning the transactions contemplated by this Agreement, except as and to the extent that any such Party shall be so obligated by applicable Law, in which case such Party shall allow the other Parties reasonable time to comment on such release or announcement and the Parties shall use their reasonable efforts to cause a mutually agreeable release or announcement to be issued; provided, however, that the foregoing shall not preclude communications or disclosures necessary to implement the provisions of this Agreement or to comply with any Law or any rules and regulations of the Securities and Exchange Commission. 6.2 Expenses. Except as otherwise provided herein, each Party will pay all costs and expenses incident to its negotiation and preparation of this Agreement and to its performance and compliance with all agreements and conditions contained herein on its part to be performed or complied with, including the fees, expenses and disbursements of its counsel, accountants, advisors and consultants. 6.3 Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered (a) when delivered personally, against written receipt, (b) if sent by registered or certified mail, return receipt requested postage prepaid, when received, (c) when delivered by a nationally recognized overnight courier service, prepaid, or (d) when received by facsimile transmission, if confirmed by the other means described in clauses (a), (b), or (c), and shall be addressed as follows: If to the Company, to: PipeFire, LLC 973 Emerson Parkway, Suite C Greenwood, Indiana 46143 Attn: Anthony Ebeyer Facsimile: (317) 882-8443 If to any Seller, to the address for such Seller, and to the attention of such Seller's Primary Beneficial Owner, as set forth on Exhibit A. If to Buyer, to: NovaStar Financial, Inc. 8140 Ward Parkway, Suite 300 Kansas City, Missouri 64114 Attn: W. Lance Anderson Facsimile: (816) 627-5877 with a copy to: Husch Blackwell Sanders LLP 4801 Main Street, Suite 1000 Kansas City, MO 64112 Attention: James G. Goettsch Fax: (816) 983-8080 6.4 Entire Agreement. This Agreement, including the initial paragraph and the recitals to this Agreement and all Schedules and Exhibits attached to this Agreement, each of which are made a part of this Agreement by this reference, constitutes the entire understanding of the Parties, and supersedes any prior agreements or understandings, written or oral, between the Parties with respect to the subject 17 

 EXECUTION COPY matter of this Agreement. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by all of the Parties. No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the Party making the waiver. 6.5 Limitation on Third Party Benefit. Except as otherwise expressly provided in this Agreement with respect to Affiliates of a Party, nothing in this Agreement is intended or shall be construed to confer upon any Person other than the Parties hereto any right, remedy or claim under or by reason of this Agreement. 6.6 Succession and Assignment. This Agreement shall be binding upon, and inure to the benefit of, the Parties and their representatives, successors and permitted assigns. None of the Parties may assign either this Agreement or any of the rights, interests or obligations hereunder without the prior written approval of the other Parties; provided, however, that Buyer may assign any or all of its rights and interests under this Agreement to one or more of its Affiliates, provided that no such assignment shall relieve Buyer from any obligations or liabilities under this Agreement. 6.7 Governing Law. This Agreement and any disputes hereunder shall be governed by and construed in accordance with the laws of the State of Indiana without giving effect to any choice or conflict of law provision or rule (whether of the State of Indiana or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Indiana. Each Party hereby consents to the jurisdiction of the federal and state courts of the State of Indiana and of the federal and state courts of the State of Missouri for purposes of any action that may be brought to enforce any provision of this Agreement, which jurisdiction shall be exclusive as to the federal and state courts of any State other than Indiana and Missouri. 6.8 Counterparts; Exchange by Electronic Transmission. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument. The Parties may execute this Agreement and all other agreements, and other documents contemplated by this Agreement and exchange counterparts of such documents by means of facsimile transmission or electronic mail and the Parties agree that the receipt of such executed counterparts shall be binding on such Parties and shall be construed as originals. 6.9 Specific Performance. Each of the Parties acknowledges and agrees that the other Parties would be damaged irreparably in the event that any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the Parties agrees that any other Party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any other state thereof having jurisdiction over the parties in the matter, in addition to any other remedy (including monetary damages) to which it may be entitled, at law or in equity. ARTICLE 7 DEFINITIONS 7.1 Certain Definitions. As used in this Agreement, the following terms shall have the respective meanings ascribed to them in this Section: 18 

 EXECUTION COPY (a) "Adverse Consequences" means all actions, suits, proceedings, hearings, investigations, charges, claims, injunctions, judgments, orders, decrees, damages, losses, penalties, costs, amounts paid in settlement and fees, including court costs and reasonable attorneys' fees and expenses. (b) "Affiliate" of any Person means any Person, directly or indirectly controlling, controlled by or under common control with such Person or related by blood, marriage or adoption to such Person. (c) "Amended Articles" has the meaning specified in Section 4.1(a). (d) "Amended Operating Agreement" has the meaning specified in Section 4.1(b). (e) "Business" has the meaning specified in the recitals to this Agreement. (f) "Claim" has the meaning specified in Section 5.3(b). (g) "Code" means the Internal Revenue Code of 1986, as amended. (h) "Company" has the meaning specified in the initial paragraph of this Agreement. (i) "Direct Owner" has the meaning specified in the initial paragraph of this Agreement. (j) "Employee Benefit Plan" has the meaning specified in Section 2.17(a). (k) "ERISA" means the employee Retirement Income Security Act of 1974, as amended. (l) "Financial Statements" or "Financial Statement" has the meaning specified in Section 2.7. (m) "GAAP" means United States generally accepted accounting principles consistently applied as in effect from time to time. (n) "Governmental Authority" means any U.S. federal, state, local or foreign court or governmental or regulatory agency or authority. (o) "Indemnified Party" has the meaning specified in Section 5.3(b). (p) "Indemnifying Party" has the meaning specified in Section 5.3(b). (q) "Initial Payment Amount" has the meaning specified in Section 1.2(a). (r) "Intellectual Property" means with regard to a Person all intellectual property of that Person including (i) means all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications and patent disclosures, together with all reissuances, continuations, continuations in part, revisions, extensions and reexaminations thereof, and statutory invention registrations; (ii) all trademarks, service marks, trade dress, logos, slogans, trade names and corporate names and rights in telephone numbers, together with all abbreviations, translations, adaptations, derivations and combinations thereof and including all goodwill associated therewith, and all applications and registrations and renewals in connection therewith; (iii) all copyrightable works of authorship, all copyright protection therein and all applications, registrations and 19 

 EXECUTION COPY renewals in connection therewith; (iv) all rights in internet web sites and internet domain names; (v) all mask works and all applications, registrations and renewals in connection therewith; (vi) all confidential or proprietary information, including research and development, know how, trade secrets, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals; (vii) all rights in telephone numbers; (viii) all other property rights created through intellectual or discovery efforts; and (ix) all copies and tangible embodiments of any or all of the above (in whatever form or medium). (s) "Knowledge of the Sellers" means the actual knowledge of any Seller, in each case after reasonable investigation, which shall include review of each such Person's own records and inquiry of those employees who have primary responsibility for the specific matter at issue. (t) "Law" means any federal, state, local, municipal, foreign, international, multinational or other constitution, statute, treaty, code, ordinance, principle of common law or other law (including any rule, regulation, plan, injunction, judgment, order, decree, ruling or charge thereunder or related thereto). (u) "Liability" means any liability of any kind, character or description (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether disputed or undisputed, whether secured or unsecured, whether joint or several, whether vested or unvested, whether liquidated or unliquidated, whether due or to become due, or whether executory, determined, determinable, or otherwise). (v) "Lien" means any charge, claim, equitable interest, community or other marital property interest, security interest, conditional sale agreement, mortgage, indenture, deed of trust, security agreement, pledge, hypothecation, option, restriction, encroachment, easement, servitude, right of first refusal, condition or other lien, encumbrance or defect of title of any kind or nature. (w) "Majority Seller" means A.R. Ebeyer Diversified Investments LLC and Anthony R. Ebeyer, jointly and severally. (x) "Material Adverse Effect" means any effect or change that would be materially adverse to the business, operations, conditions (financial or otherwise), operating results, prospects or earnings of the Company or any Subsidiary, the Business, or any of assets of the Company or of any Subsidiary. (y) "Material Contract" has the meaning specified in Section 2.15(b). (z) "Membership Interest" means the entire interest of a Person in the Company, including, without limitation, such Person's right to vote as a member, Units, and right to receive profits, losses, distributions or any other economic benefits from the Company. (aa) "Net Income" means, for each applicable calendar month, the net income (or loss) of Company for such month, in accordance with GAAP; provided, however, that there shall be excluded from Net Income: (i) any aggregate net gain or loss during such period arising from the sale or other disposition of capital assets; (ii) any losses resulting from any write-down of any assets that is not required by GAAP; and (iii) any net income or gain or loss from extraordinary items other than discontinued operations. 20 

 EXECUTION COPY (bb) "Party" or "Parties" means Buyer, the Company, or any of the Sellers, individually or collectively, as applicable. (cc) "Person" means an individual, a corporation, a partnership, a limited liability company or partnership, an association, Governmental Authority, a trust or other entity or organization. (dd) "Pre-Tax Income" means, for each applicable calendar month, the sum of Net Income for such month plus, to the extent deducted in the determination of Net Income for such month, (i) the amount of all income taxes and amortization of goodwill, plus (ii) the amount of any distributions made in respect of Membership Interests in the Company, plus (iii) the amount of any fees, salaries, wages, bonuses or other compensation paid to employees, representatives, agents or consultants of the Company or of any Affiliate of the Company, except in the ordinary course of business. For purposes of the foregoing, the amount of compensation paid at market-based or cost-based rates for services rendered shall be deemed to be an amount in the ordinary course of business. In addition, for purposes of determining Net Income and Pre-Tax Income for any calendar month, any expenses paid at a time inconsistent with the Company's contractual obligations and previously existing payment practices, if any, with respect thereto shall not be deemed to have been paid at such time and, instead, shall be deemed to have been paid at the time that such payment would have been made under such contractual obligations and existing payment practices. (ee) "Primary Beneficial Owner" has the meaning specified in the initial paragraph of this Agreement. (ff) "Purchase Price" has the meaning specified in Section 1.2. (gg) "Purchased Interest" has the meaning specified in Section 1.1. (hh) "Second Payment Amount" has the meaning specified in Section 1.2(b). (ii) "Securities Act" means the Securities Act of 1933, as amended, and all rules and regulations promulgated thereunder. (jj) "Seller" or "Sellers" has the meaning specified in the initial paragraph of this Agreement. (kk) "Subsequent Payment Amounts" has the meaning specified in Section 1.2. (ll) "Subsidiary" has the meaning specified in Section 2.4. (mm) "Tax Returns" has the meaning specified in Section 2.19(a). (nn) "Taxes" means all federal, state, local or foreign income, gross receipts, license, employment, payroll, withholding, Social Security (or similar), unemployment, severance, premium, disability, excise, value-added, accumulated earnings, windfall profit, net worth, alternative or add-on minimum, estimated, sales, use, transfer, registration, real property, stamp, environmental (including taxes under Code ss.59A), personal property, use and occupancy, business and occupation, maritime, mercantile, tariff, custom, duty, capital stock, franchise, gift or estate and all other taxes, fees, assessments, levies, tariffs, charges or duties of any kind, character, nature or description, including any interest, penalties or additions thereto. (oo) "Third Payment Amount" has the meaning specified in Section 1.2(c). 21 

 EXECUTION COPY (pp) "Unit" means the right of any Person to vote on matters submitted to the members of the Company at a meeting of the Company or by written consent. 7.2 Legal Counsel. Majority Seller engaged Baker & Daniels LLP to represent Majority Seller in connection with the preparation of this Agreement and the documents related hereto, the employment agreement between Majority Seller and the Company, and the Company's amendments to its operating agreement (collectively, the "Related Agreements"). Baker & Daniels LLP was not, and has not been engaged, to provide legal counsel to any person other than the Majority Seller. Each Primary Beneficial Owner and Direct Owner hereby: (a) approves Baker & Daniels LLP's representation of Majority Seller in the preparation of the Related Agreements; (b) acknowledges that no legal counsel has been engaged by Majority Seller to protect or otherwise represent the interests of the other Primary Beneficial Owners or Direct Owners, that Baker & Daniels LLP has not been engaged by any party other than the Majority Seller and that actual or potential conflicts of interest may exist among the Majority Seller and the other Primary Beneficial Owners and Direct Owners in connection with the preparation of the Related Agreements (with the consequence that the other Primary Beneficial Owners' and Direct Owners' interests may not be vigorously represented unless each such other Primary Beneficial Owner and Direct Owner engages his, her or its own legal counsel, respectively); and (c) acknowledges further that he, she or it has been afforded the opportunity to engage and seek the advice of his, her or its own legal counsel before entering into the Related Agreements. 7.3 Rules of Construction. All references to any Law shall be deemed to include any amendments thereto, and any successor Law, unless the context otherwise requires. "Including" means "including without limitation" and does not limit the preceding words or terms. The word "or" is used in the inclusive sense of "and/or". The singular shall include the plural and vice versa. Each word of gender shall include each other word of gender as the context may require. References to "Articles" or "Sections" or "Schedules" or "Exhibits" shall mean Articles or Sections of this Agreement or Schedules or Exhibits attached to this Agreement, unless otherwise expressly indicated. The title of each Article and the headings or titles preceding the text of the Sections are inserted solely for convenience of reference, and shall not constitute a part of this Agreement. The Parties have each participated in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. [Remainder of page intentionally left blank; signature page follows.] 22 

 EXECUTION COPY IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. BUYER: NOVASTAR FINANCIAL, INC. By: /s/ Rodney Schwatken ------------------------------------- Rodney Schwatken, Chief Financial Officer COMPANY: PIPEFIRE, LLC By: /s/ Anthony R. Ebeyer -------------------------------------- Anthony R. Ebeyer, President and CEO SELLERS: A. R. EBEYER DIVERSIFIED INVESTMENTS LLC By: /s/ Anthony R. Ebeyer -------------------------------------- Name: Anthony R. Ebeyer ------------------------------------ Title: President ----------------------------------- /s/ Anthony R. Ebeyer ----------------------------------------- Anthony R. Ebeyer B H HURST, INC. By: /s/ Thomas R. Hurst -------------------------------------- Name: Thomas R. Hurst ------------------------------------ Title: President ----------------------------------- /s/ Thomas R. Hurst ----------------------------------------- Thomas R. Hurst 

 EXECUTION COPY BARK INVESTMENTS, INC. By: /s/ Chad Barker -------------------------------------- Name: Chad Barker ------------------------------------ Title: President ----------------------------------- /s/ Chad W. Barker ----------------------------------------- Chad W. Barker M & A PROFESSIONAL SERVICES, INC. By: /s/ Michael J. Floyd -------------------------------------- Name: Michael J. Floyd ------------------------------------ Title: President ----------------------------------- /s/ Michael J. Floyd ----------------------------------------- Michael J. Floyd CACTUS GRAPHICS, INC. By: /s/ Jeffrey R. Gannaway -------------------------------------- Name: Jeffrey R. Gannaway ------------------------------------ Title: CEO ----------------------------------- /s/ Jeffrey R. Gannaway ----------------------------------------- Jeffrey R. Gannaway 

 BROWN & ASSOCIATES, INC. By: /s/ Brian D. Brown -------------------------------------- Name: Brian D. Brown ------------------------------------ Title: President ----------------------------------- /s/ Brian D. Brown ----------------------------------------- Brian D. Brown WRIGHT DIVERSIFIED INVESTMENTS, INC. By: /s/ James C. Wright -------------------------------------- Name: James C. Wright ------------------------------------ Title: President ----------------------------------- /s/ James C. Wright ----------------------------------------- James C. Wright