AGREEMENT AND PLAN OF
MERGER
This Agreement and Plan of
Merger (
this “Agreement”) is entered into as of March 31,
2009, by and among Huntington Capital Financing, LLC
(“Huntington Capital Financing”), HCFFL, LLC
(“HCFFL LLC”), Franklin Asset, LLC
(“Franklin LLC”), Franklin Asset Merger Sub, LLC
(“Merger Sub”), Franklin Credit Holding
Corporation (“Franklin Holding”) solely for the
purposes of covenants made by it in Section 10(b), and
Franklin Credit Asset Corporation, Tribeca Lending Corp., and
each of their respective subsidiaries listed on Schedule I
(the “Franklin Entities”). (HCFFL LLC and Merger Sub
are sometimes hereinafter referred to as the “Constituent
Entities.”).
A.
Ownership of HCFFL LLC . HCFFL LLC is a wholly owned
subsidiary of Huntington Capital Financing.
B.
Ownership of Merger Sub . Merger Sub is a wholly owned
subsidiary of Franklin LLC.
C.
Merger . The parties desire that HCFFL LLC shall acquire
Merger Sub by a merger of Merger Sub with and into HCFFL LLC, in
accordance with the terms and conditions contained in this
Agreement.
In consideration
of the foregoing Recitals, which shall form a part of this
Agreement, and the mutual covenants contained herein, the parties
hereby agree as follows:
1.
The Merger . Subject to the terms and conditions of this
Agreement and in accordance with Sections 92A.100 and 92A.150
of the Nevada Revised Statutes (the “NRS”) and Section
18-209 of the Delaware Limited Liability Company Act (the
“Delaware Act”), at the Effective Time (as defined in
Section 4 hereof), Merger Sub shall be merged with and into
HCFFL LLC (the “Merger”). HCFFL LLC shall be the
surviving entity in the Merger (sometimes hereinafter referred to
as the “Surviving Entity”), shall continue its
existence as a limited liability company under the laws of the
State of Nevada, and shall continue to operate under the name
“HCFFL, LLC” following the consummation of the Merger.
At the Effective Time, the separate existence of Merger Sub shall
cease.
2.
Articles of Organization; Operating Agreement . The
articles of organization and operating agreement of HCFFL LLC in
effect at the Effective Time shall be the articles of organization
and operating agreement of Surviving Entity after the Effective
Time and until thereafter duly altered, amended, or repealed in
accordance with the provisions thereof and applicable
law.
3.
Conversion, Exchange, Extinguishment of Membership Interests and
Shares, and Contributions by Huntington .
(a)
HCFFL LLC Interests . All of the membership interests in
HCFFL LLC issued and outstanding immediately prior to the Effective
Time shall remain issued and outstanding after the Effective Time
and shall continue to be owned by Huntington Capital
Financing.
(b)
Merger Sub Interests . At the Effective Time, the membership
interests of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be cancelled and extinguished and in
exchange therefor the holders thereof shall be entitled to receive,
by virtue of the Merger and without any action on the part of the
holders thereof, the following consideration:
(1)
7 of the Common Shares of Huntington Capital Financing;
and
(2)
4,724.1330831 of the Class C Preferred Shares of Huntington
Capital Financing.
(c)
Transfer of Certificates; Payment of Consideration . On the
Closing Date, Huntington Capital Financing shall deliver to
Franklin LLC certificates representing the number of shares of
Huntington Capital Financing Common Shares and Class C
Preferred Shares (the “Huntington Capital Financing
Stock”) to which it is entitled as specified in paragraph
(b) above.
(d)
Restricted Shares . The certificates evidencing shares of
Huntington Capital Financing Stock to be issued to Franklin LLC at
Closing shall bear the following legend in conspicuous
type:
THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED
UNDER ANY STATE SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
QUALIFICATION WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION OR QUALIFICATION IS NOT
REQUIRED.
(e)
Transfers by Huntington . On the Closing Date, The
Huntington National Bank shall cause to be transferred by the
existing members of Huntington Capital Financing the assets listed
on Schedule 3(e) in exchange for 1,298.638625337070 of
the Common Shares of Huntington Capital Financing (the
“Huntington Transfer”).
4.
Closing . The closing shall take place on or before
March 31, 2009, or such later date as the parties may agree
(the “Closing Date”). Upon the execution and delivery
of all such documents and the performance of all such obligations,
including the obligations of The Huntington National Bank and
Huntington Capital Financing contained in Section 3(e), HCFFL
LLC shall cause Certificates of Merger to be filed with the
Secretary of State of Nevada and the
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Secretary of
State of Delaware. The Merger shall become effective at
11:59 p.m. local time on the date on which such Certificates
of Merger are filed (the “Effective Time”).
5.
Effect of the Merger . At the Effective Time, the Merger
shall have the effects provided for herein and in
Section 92A.250 of the NRS and Section 18-209 of the
Delaware Act. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, the separate existence of
Merger Sub shall cease; all assets and property of any kind, real,
personal, and mixed, tangible and intangible, choses in action,
rights, licenses, permits, and contract rights, then owned by each
Constituent Entity, or which would inure to either of them, shall
immediately, by operation of law and without any conveyance,
transfer, or further action, become the assets and property of the
Surviving Entity. All rights and obligations of the Constituent
Entities shall remain unimpaired and the Surviving Entity shall
succeed to all such rights and obligations.
6.
Further Actions . If, at any time after the Effective
Time, the Surviving Entity shall consider or be advised that any
further assignments or assurances in law or any other acts are
necessary or desirable (a) to vest, perfect or confirm, of
record or otherwise, in the Surviving Entity, title to and
possession of any property or right of Merger Sub acquired or to be
acquired by reason of, or as a result of, the Merger, or
(b) to carry out otherwise the purpose of this Merger
Agreement, Merger Sub and its officers and directors shall be
deemed to have granted hereby to the Surviving Entity an
irrevocable power of attorney to execute and deliver all such
proper deeds, assignments and assurances in law and to do all acts
necessary or proper to vest, perfect or confirm title to and the
possession of such property or rights in the Surviving Entity and
otherwise to carry out the purposes of this Agreement; and the
proper officers of the Surviving Entity are hereby fully authorized
in the name of the Surviving Entity or otherwise to take any and
all such action.
7.
Representations And Warranties of the Franklin Entities
.
(a) The
Franklin Entities jointly and severally represent and warrant to
Huntington Capital Financing and HCFFL LLC as follows:
(1)
Power and Authority . With the exception of obtaining any
authorization of the shareholders of Franklin Holding that may be
required, the Agreement has been duly authorized by all required
corporate action by the Franklin Entities and constitutes a valid
and binding obligation of each of the Franklin Entities. With the
exception of obtaining any authorization of the shareholders of
Franklin Holding that may be required, the execution of this
Agreement and the consummation of all transactions contemplated by
this Agreement will not result in a violation of any of the terms
or provisions of any indenture or other agreement to which any of
the Franklin Entities may be a party or by which any of the
Franklin Entities or their property may otherwise be bound or of
any law, rule, license, regulation, judgment, order, or decree
governing or affecting any of the Franklin Entities or their
property.
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(b) Franklin
LLC represents and warrants to Huntington Capital Financing and
HCFFL LLC as follows:
(1)
Franklin LLC is aware of the kind of information regarding
Huntington Capital Financing that would be available in a
registration statement filed under the provisions of the 1933 Act
and Franklin LLC has had access to the same kind of information
about Huntington Capital Financing that would be available in such
a registration statement and any additional information necessary
to verify the accuracy of such information;
(2)
Franklin LLC has had an opportunity to discuss Huntington Capital
Financing’s business, management, financial affairs and the
terms and conditions of the offering of the shares with Huntington
Capital Financing’s management and that no requested
information, oral or written, has been withheld from Franklin
LLC;
(3)
Franklin LLC is aware that the shares of Huntington Capital
Financing Stock to be issued under this Agreement have not been
registered under either federal or state securities laws in
reliance on certain exemptions and, accordingly, the shares may not
be sold or otherwise transferred in the absence of such
registration or qualification without an opinion of counsel
satisfactory to Huntington Capital Financing that such registration
or qualification is not required;
(4)
Franklin LLC understands that (A) in reliance upon the
representations made by Franklin LLC herein, the Huntington Capital
Financing Stock has not been registered under the 1933 Act or any
state securities laws, (B) since the Huntington Capital
Financing Stock has not been registered, Franklin LLC must bear the
economic risk of holding the Huntington Capital Financing Stock and
may not be able to liquidate its investment in the Huntington
Capital Financing Stock, and (C) there is not presently a
trading market for the Huntington Capital Financing Stock, and
there is no assurance that such market will exist in the
future;
(5)
Franklin LLC is aware that there are economic variables and risks
that could adversely affect an investment in Huntington Capital
Financing Stock, and that Franklin LLC has relied primarily on
Franklin LLC’s own independent analysis to make an investment
decision with respect to the Huntington Capital Financing Stock;
and
(6)
Franklin LLC is acquiring the Huntington Capital Financing Stock
for Franklin LLC’s own account, for investment only, and not
with a view to or for the sale, distribution, or fractionalization
thereof.
It is
understood that Huntington Capital Financing will rely upon these
representations and warranties in accepting the terms of this
Agreement and that such representations and warranties
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will survive
the execution and delivery of this Agreement and the closing of the
transactions contemplated by this Agreement.
8.
Representations and Warranties of Merger Sub, Franklin LLC and
the Franklin Entities . Merger Sub, Franklin LLC and the
Franklin Entities jointly and severally represent and warrant to
Huntington Capital Financing and HCFFL LLC as follows:
(a)
Organization and Standing . Merger Sub is a limited
liability company validly existing and in good standing under the
laws of the State of Delaware and is entitled to own or lease its
properties and to carry on its business as and in the places where
such properties are now owned, leased, or operated or such business
is now conducted. The copies of the certificate of formation and
operating agreement of Merger Sub previously delivered to
Huntington Capital Financing constitute true, correct, and complete
copies of Merger Sub’s certificate of formation and operating
agreement and reflect all amendments thereto through and including
the date of this Agreement.
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