MRLN Marlin Business Services Corporation

Check the appropriate box:

 

To our Shareholders:

On April 18, 2021, Marlin Business Services Corp., a Pennsylvania corporation (which we refer to as the “Company,” “we,” or “us”), entered into an Agreement and Plan of Merger (which we refer to as the “merger agreement”) by and among the Company, Madeira Holdings, LLC, a Delaware limited liability company (which we refer to as “Parent”), and Madeira Merger Subsidiary, Inc., a Pennsylvania corporation and a wholly owned subsidiary of Parent (which we refer to as “Merger Sub”). Parent and Merger Sub are subsidiaries of funds managed by HPS Investment Partners, LLC (which we refer to as “HPS”). Upon the terms and subject to the conditions set forth in the merger agreement, Merger Sub will be merged with and into the Company (which we refer to as the “merger”), with the Company surviving the merger as a wholly owned subsidiary of Parent.

At the effective time of the merger (which we refer to as the “effective time”), each issued and outstanding share of common stock, par value $0.01 per share, of the Company (which we refer to as the “Company common stock” and holders of which we refer to as “Company shareholders”) (other than (i) shares that immediately prior to the effective time are owned by Parent, Merger Sub or any other wholly owned subsidiary of Parent or owned by the Company or any wholly owned subsidiary of the Company (including as treasury stock) and (ii) shares that are held by any record holder who is entitled to demand and properly demands payment of the fair value of such shares as a dissenting shareholder pursuant to, and who complies in all respects with, the provisions of Subchapter 15D of the Pennsylvania Business Corporation Law of 1988) will be cancelled and converted into the right to receive $23.50 per share in cash, without interest, and subject to the adjustment described below (which we refer to as the “merger consideration”).

The merger consideration is subject to potential downward adjustment equal to (a) the amount, if any, by which “Covered Costs” exceed $8.0 million divided by (b) the number of “Fully Diluted Shares.” For purposes of the merger agreement, “Covered Costs” means (i) the fees and expenses of legal and other third party advisors and (ii) any costs and expenses associated with the payoff or settlement of a deposit of Marlin Business Bank (which we refer to as “MBB”) to the extent in excess of the par value of such deposit or solely attributable to accrued interest with respect to such deposit, in each case, incurred by the Company after the date of the merger agreement solely in connection with the De-Banking (as defined in the accompanying proxy statement). “Fully Diluted Shares” means all issued and outstanding shares of Company common stock, together with all such shares that the Company would be required to issue assuming the conversion or exchange of any then-outstanding warrants, options, benefit plans or obligations, securities or instruments convertible or exchangeable into, or rights exercisable for, such securities, but only to the extent so exercisable, convertible or exchangeable prior to consummation of the merger or exercisable, convertible or exchangeable as a result of the consummation of the merger. As a result, the merger consideration may be less than $23.50 per share. The merger consideration represents a premium of 65% over the closing price of the Company’s common stock of $14.24 on April 16, 2021, the last trading day prior to public announcement of the merger agreement, on the Nasdaq Global Select Market.

On June 29, 2021, the most recent practicable date before this proxy statement was mailed to the Company shareholders, the closing price for the Company common stock on the Nasdaq Global Select Market was $22.73 per share. We urge you to obtain current market quotations for Marlin Business Services Corp. (trading symbol “MRLN”).

The Company will hold a special meeting of the Company shareholders (which we refer to as the “special meeting”) in connection with the merger. Company shareholders will be asked to vote to adopt the merger agreement and approve related matters, as described in the accompanying notice of special meeting of shareholders and proxy statement. Adoption of the merger agreement requires the affirmative vote at the special meeting or by proxy of holders of at least a majority of the votes cast by all holders of the shares of Company common stock entitled to vote thereon at the special meeting (which we refer to as the “Company requisite vote”).

The special meeting will be completely virtual and conducted via live audio webcast because of the public health impact of the COVID-19 pandemic. The matters to be acted upon are described in the accompanying notice of special meeting of shareholders and proxy statement.

You will be able to attend the special meeting by first registering at www.virtualshareholdermeeting.com/MRLN2021SM. To participate in the special meeting, you will need the 16-digit control number included on your notice, on your proxy card or on the instructions that accompanied your proxy materials. Shareholders will be able to listen, vote, and submit questions during the virtual meeting. Regardless of whether you plan to attend the special meeting, we encourage you to vote your shares by mail, by telephone or through the internet following the procedures described in the accompanying proxy statement.

The board of directors of the Company has unanimously (a) determined and declared that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are fair to the shareholders of the Company and are in the best interests of the Company and the shareholders of the Company, (b) declared advisable and approved the merger agreement and the transactions contemplated by the merger agreement, including the merger and the De-Banking, and the execution, delivery and performance of the merger agreement and (c) recommended that the shareholders of the Company vote for the adoption of the merger agreement. The board of directors of the Company recommends that the Company shareholders vote “FOR” the adoption of the merger agreement and “FOR” the other matters to be considered at the special meeting.

The accompanying proxy statement provides detailed information about the special meeting, the merger, the merger agreement, the documents related to the merger and other related matters. Please carefully read the entire proxy statement, including its annexes, and any documents incorporated in the proxy statement by reference. In particular, you should read the section entitled “Cautionary Statement Concerning Forward-Looking Statements” in the accompanying proxy statement for a description of the risks related to the proposed merger and the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and the other reports filed by the Company with the Securities and Exchange Commission and incorporated by reference into the proxy statement, for a description of the risks related to the Company’s business.

On behalf of the board of directors of the Company, thank you for your cooperation and continued support of the Company.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the merger, passed upon the merits or fairness of the merger agreement or the transactions contemplated thereby or passed upon the adequacy or accuracy of the disclosure in the accompanying proxy statement. Any representation to the contrary is a criminal offense.

The date of this proxy statement is June 30, 2021 and it is first being mailed or otherwise delivered to the Company shareholders on or about July 2, 2021.

 

The board of directors of the Company has fixed the close of business on June 25, 2021 as the record date for the special meeting. Only Company shareholders of record at that time are entitled to notice of, and to vote at, the special meeting or any adjournment or postponement thereof. Adoption of the merger agreement requires the affirmative vote at the special meeting or by proxy of holders of at least a majority of the votes cast by all holders of the shares of Company common stock entitled to vote thereon at the special meeting. Approval of the compensation proposal and the adjournment proposal also require the affirmative vote at the special meeting or by proxy of holders of at least a majority of the votes cast by all holders of the shares of Company common stock entitled to vote thereon at the special meeting.

The board of directors of the Company has unanimously (a) determined and declared that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are fair to the shareholders of the Company and are in the best interests of the Company and the shareholders of the Company, (b) declared advisable and approved the merger agreement and the transactions contemplated by the merger agreement, including the merger and the De-Banking, and the execution, delivery and performance of the merger agreement and (c) recommended that the shareholders of the Company vote for the adoption of the merger agreement. The board of directors of the Company recommends that the Company shareholders vote “FOR” the merger proposal, “FOR” the compensation proposal and “FOR” the adjournment proposal.

Your vote is very important. We cannot complete the merger unless the Company shareholders approve the merger proposal.

If you have any questions about the merger or the accompanying proxy statement, would like additional copies of the proxy statement or need assistance voting your shares of Company common stock, please contact the Company’s Corporate Secretary at 300 Fellowship Road, Mount Laurel, New Jersey 08054, or by telephone at 888-479-9111. If you hold your shares in “street name” through a bank, broker or other holder of record, please also contact your bank, broker or other holder of record for additional information.

Each copy of the proxy statement mailed to the Company shareholders is accompanied by a form of proxy card with instructions for voting. Regardless of whether you plan to attend the special meeting, please vote as soon as possible by accessing the Internet site listed on the proxy card, voting telephonically using the phone number listed on the proxy card or submitting your proxy card by mail. If you hold shares of Company common stock in your name as a shareholder of record and are voting by mail, please complete, sign, date and return the accompanying proxy card in the enclosed postage-paid return envelope. This will not prevent you from voting at the special meeting, but it will help to secure a quorum and avoid added solicitation costs. Any holder of record of shares of Company common stock who is present at the special meeting may vote at the special meeting instead of by proxy, thereby canceling any previous proxy. In any event, a proxy may be revoked at any time before the special meeting in the manner described in the accompanying proxy statement. Information and applicable deadlines for voting through the Internet or by telephone are set forth in the enclosed proxy card instructions. If you hold your stock in “street name” through a bank, broker or other holder of record, please follow the instructions on the voting instruction card furnished by the record holder.

Under Pennsylvania law, Company shareholders who do not vote in favor of or consent to the adoption of the merger agreement will have dissenters’ rights to seek the fair value of their shares of Company common stock, but only if they submit a written demand to the Company for such fair value before the vote on the merger proposal and comply with the other Pennsylvania law procedures explained in the accompanying proxy statement. Company shareholders who do not vote in favor of the merger proposal and who submit a written demand for payment of the fair value of their shares of Company common stock before the vote on the merger proposal and comply with the other Pennsylvania law procedures will not receive the merger consideration.

The accompanying proxy statement provides a detailed description of the special meeting, the merger, the merger agreement, the documents related to the merger and other related matters. Please carefully read the entire proxy statement, including its annexes and any documents incorporated in the proxy statement by reference.

Date: June 30, 2021

This proxy statement incorporates important business and financial information about the Company from documents filed with the Securities and Exchange Commission (which we refer to as the “SEC”) that are not included in or delivered with this proxy statement. You can obtain any of the documents filed with or furnished to the SEC by the Company at no cost from the SEC’s website at https://www.sec.gov. You may also request copies of these documents, including documents incorporated by reference into this proxy statement, at no cost by contacting the Company at the following address:

Marlin Business Services Corp.

Attention: Corporate Secretary

300 Fellowship Road

Mount Laurel, New Jersey 08054

You will not be charged for any of these documents that you request. To obtain timely delivery of these documents, you must request them no later than five business days before the date of the special meeting. This means that Company shareholders requesting documents must do so by July 28, 2021 in order to receive them before the special meeting.

For additional questions about the merger, assistance in submitting proxies or voting shares of Company common stock, or to request additional copies of the proxy statement or the enclosed proxy card, please contact:

Marlin Business Services Corp.

Attention: Corporate Secretary

300 Fellowship Road

Mount Laurel, New Jersey 08054

Telephone: 888-479-9111

If you hold your shares in “street name” through a bank, broker or other holder of record, please also contact your bank, broker or other holder of record for additional information.

You should rely only on the information contained in, or incorporated by reference into, the accompanying proxy statement. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this proxy statement. This proxy statement is dated June 30, 2021 and you should assume that the information in this proxy statement is accurate only as of such date.

This proxy statement does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

See “Where You Can Find More Information” beginning on page 92 for more details.

TABLE OF CONTENTS

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The following questions and answers are intended to address briefly some commonly asked questions that you may have about the merger, the merger agreement and the special meeting. The information in this section does not provide all of the information that might be important to you with respect to the merger or the special meeting. We urge you to read carefully the remainder of this proxy statement, the annexes attached hereto and the other documents referred to or incorporated by reference herein, which contain additional important information. You may obtain the information incorporated by reference into this proxy statement without charge by following the instructions in “Where You Can Find More Information.”

The merger cannot be consummated unless, among other things, holders of at least a majority of the votes cast by all holders of the shares of common stock, par value $0.01 per share, of the Company (which we refer to as “Company common stock” and holders of which we refer to as “Company shareholders”) entitled to vote thereon at the special meeting to the Company has called to adopt the merger agreement and approve related matters (which special meeting we refer to as the “special meeting” and which vote we refer to as the “Company requisite vote”).

The merger consideration is subject to potential downward adjustment (which we refer to as the “De-Banking adjustment”) equal to (a) the amount, if any, by which “Covered Costs” exceed $8.0 million divided by (b) the number of “Fully Diluted Shares.” For purposes of the merger agreement, “Covered Costs” means (i) the fees and expenses of legal and other third party advisors and (ii) any costs and expenses associated with the payoff or settlement of a deposit of Marlin Business Bank (which we refer to as “MBB”) to the extent in excess of the par value of such deposit or solely attributable to accrued interest with respect to such deposit, in each case, incurred by the Company after the date of the merger agreement solely in connection with the De-Banking (as defined in the accompanying proxy statement). “Fully Diluted Shares” means all issued and outstanding shares of Company common stock, together with all such shares that the Company would be required to issue assuming the conversion or exchange of any then-outstanding warrants, options, benefit plans or obligations, securities or instruments convertible or exchangeable into, or rights exercisable for, such securities, but only to the extent so exercisable, convertible or exchangeable prior to consummation of the merger or exercisable, convertible or exchangeable as a result of the consummation of the merger. As a result, the merger consideration may be less than $23.50 per share.

This proxy statement contains important information about the merger and the other proposals being voted on at the special meeting. You should read it carefully and in its entirety. The enclosed materials allow you to have your shares of Company common stock voted by proxy without attending the special meeting. Your vote is important and we encourage you to submit your proxy as soon as possible.

If you hold your shares in your name as a shareholder of record, you can complete, sign, date and mail your proxy card in the enclosed postage-paid return envelope, and we request that you do this as soon as possible. Alternatively, you may vote through the Internet or by telephone. Information and applicable deadlines for voting by mail, through the Internet or by telephone are set forth in the enclosed proxy card instructions.

If you hold your shares in “street name” through a bank, broker or other holder of record, please refer to the instructions for voting your shares provided by such bank, broker or other holder of record.

If your Company common stock is held in “street name” through your bank, broker or other holder of record, please also contact your bank, broker or other holder of record for additional information.

This proxy statement contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are intended to be protected by the safe harbor provided therein. We generally identify forward-looking statements, particularly those statements regarding the benefits of the proposed merger between Merger Sub and the Company, the anticipated timing of the transaction and the business of each company, by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “would,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “projects,” “strategy,” “future,” “opportunity,” “will likely result” or the negative version of those words or other comparable words. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, you are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict.

A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements in this proxy statement, including, but not limited to:

For additional factors that could materially affect our financial results and our business generally, please refer to the Company’s filings with the SEC, including but not limited to, the factors, uncertainties and risks described under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (which we refer to as the “2020 Annual Report”) and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, and the other reports filed by the Company with the SEC. See “Where You Can Find More Information.” The Company undertakes no obligation to revise these statements following the date of this communication, except as required by law.

Marlin Business Services Corp.

300 Fellowship Road

Mount Laurel, New Jersey 08054

Telephone: (888) 479-9111

The Company, a Pennsylvania corporation, is a nationwide provider of credit products and services to small businesses. In 2008, we opened Marlin Business Bank (which we refer to as “MBB”), a commercial bank chartered by the State of Utah and a member of the Federal Reserve System, which serves as the Company’s primary funding source through its issuance of Federal Deposit Insurance Corporation insured deposits. In 2009, the Company became a bank holding company subject to the Bank Holding Company Act and in 2010, the Federal Reserve Bank of Philadelphia confirmed the effectiveness of Marlin Business Services Corp.’s election to become a financial holding company (while remaining a bank holding company) pursuant to Sections 4(k) and (l) of the Bank Holding Company Act and Section 225.82 of the Federal Reserve Board's Regulation Y. Such election permits the Company to engage in activities that are financial in nature or incidental to a financial activity, including the maintenance and expansion of our reinsurance activities conducted through our wholly owned subsidiary, AssuranceOne, Ltd. The products and services we provide to our customers include loans and leases for the acquisition of commercial equipment and working capital loans.

Company common stock is traded on Nasdaq under the symbol “MRLN.” Additional information about the Company and its subsidiaries is included in documents incorporated by reference into this proxy statement. See “Where You Can Find More Information.” The Company maintains a website at marlincapitalsolutions.com. The information provided on the Company’s website is not part of this proxy statement and is not incorporated by reference.

Madeira Holdings, LLC

c/o HPS Investment Partners, LLC

40 West 57th Street, 33rd Floor

New York, New York 10019

Telephone: (212) 287-6767

Parent is a Delaware limited liability company and a subsidiary of funds managed by HPS Investment Partners, LLC (which we refer to as “HPS”). Parent was formed solely for the purpose of entering into the merger agreement and consummating the merger. Parent has not carried on any activities on or prior to the date of this proxy statement except for activities incidental to its formation and activities in connection with Parent’s acquisition of the Company.

Madeira Merger Subsidiary, Inc.

c/o HPS Investment Partners, LLC

40 West 57th Street, 33rd Floor

New York, New York 10019

Telephone: (212) 287-6767

Merger Sub is a Pennsylvania corporation and a direct, wholly owned subsidiary of Parent. Merger Sub was formed solely for the purpose of entering into the merger agreement and consummating the merger. Merger Sub has not carried on any activities on or prior to the date of this proxy statement except for activities incidental to its formation and activities in connection with Parent’s acquisition of the Company. Upon completion of the merger, Merger Sub will merge with and into the Company and Merger Sub will cease to exist.

This section contains information for the Company shareholders about the special meeting that the Company has called to allow the Company shareholders to consider and vote on the merger proposal and other matters. The Company is mailing this proxy statement to you, as a Company shareholder, on or about July 2, 2021. This proxy statement is accompanied by a notice of the special meeting and a form of proxy card that the Company board is soliciting for the Company at the special meeting and at any adjournments or postponements thereof.

This proxy statement is being furnished to the Company shareholders as part of the solicitation of proxies by the Company board from the Company shareholders for use at the special meeting to be held on August 4, 2021, at 9:00 a.m., Eastern Time, or at any postponement or adjournment thereof. The special meeting will be completely virtual and conducted via live audio webcast because of the public health impact of the COVID-19 pandemic. You will be able to attend the special meeting by first registering at www.virtualshareholdermeeting.com/MRLN2021SM. To participate in the special meeting, you will need the 16-digit control number included on your notice, on your proxy card or on the instructions that accompanied your proxy materials. Company shareholders will be able to listen, vote, and submit questions during the virtual meeting.

At the special meeting, you will be asked to consider and vote upon the following matters:

The Company shareholders must adopt the merger agreement by approving the merger proposal in order to consummate the merger. A copy of the merger agreement is attached as Annex A to this proxy statement. You are urged to read the merger agreement carefully in its entirety.

The Company board has unanimously (a) determined and declared that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are fair to the shareholders of the Company and are in the best interests of the Company and the shareholders of the Company, (b) declared advisable and approved the merger agreement and the transactions contemplated by the merger agreement, including the merger and the De-Banking (as defined in the section entitled “The Merger—Regulatory Approvals Required for the Merger—De-Banking”), and the execution, delivery and performance of the merger agreement and (c) recommended that the shareholders of the Company vote for the adoption of the merger agreement.

The Company board unanimously recommends that you vote “FOR” the merger proposal, “FOR” the compensation proposal and “FOR” the adjournment proposal. See “The Merger—Recommendation of the Company Board of Directors; Reasons for the Merger” for a more detailed discussion of the Company board’s recommendation.

The Company board has fixed the close of business on June 25, 2021 as the record date for the determination of the Company shareholders entitled to notice of, and to vote at, the special meeting. As of the close of business on the record date, there were 12,030,269 shares of Company common stock outstanding and entitled to vote, held by approximately 113 holders of record. You will have one vote on each matter properly coming before the special meeting for each share of Company common stock that you owned on the record date.

The presence virtually at the special meeting or by proxy of the holders of record of a majority of the outstanding voting shares of the Company as of the record date is necessary to constitute a quorum at the special meeting. All shares of Company common stock present virtually at the special meeting or represented by proxy,

including abstentions, will be treated as present for purposes of determining the presence or absence of a quorum for all matters voted on at the special meeting. If a beneficial owner of Company common stock held by a broker in “street name” does not give voting instructions to the broker, then those shares will not be counted as present virtually or by proxy at the special meeting.

All Company shareholders, including shareholders of record and shareholders who hold their shares through banks, brokers or other holders of record, are invited to attend the virtual special meeting. Company shareholders of record can vote virtually at the special meeting.

If you are a shareholder of record, you may vote your shares of Company common stock on matters presented at the special meeting in any of the following ways:

If you are a beneficial owner of shares of Company common stock held in “street name,” you should receive instructions from your bank, broker or other holder of record that you must follow in order to have your shares of Company common stock voted. If you have not received such voting instructions or require further information regarding such voting instructions, contact your bank, broker or other holder of record. If your bank, broker or other holder of record holds your shares of Company common stock in “street name,” such record holder will vote your shares of Company common stock only if you provide instructions on how to vote by filling out the voter instruction form sent to you by such record holder with this proxy statement. Please note that, if you are a beneficial owner of shares of Company common stock held in “street name” and wish to vote virtually at the special meeting, you may be required to provide proof of beneficial ownership, such as your most recent account statement as of the record date, a copy of the voting instruction form provided by your broker, bank, trustee, or nominee, or other similar evidence of ownership. If you do not comply with the procedures outlined above, you will not be admitted to the virtual special meeting.

Under stock exchange rules, brokers who hold shares of Company common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, such record holders are not allowed to exercise their voting discretion with respect to the approval of matters determined to be “non-routine.” “Broker non-votes” are shares held in “street name” by brokers that are present virtually or represented by proxy at the special meeting, but for which the beneficial owner has not provided the record holder with instructions on how to vote on a particular proposal and such record holder does not have discretionary voting power with respect to such proposal. Under applicable rules, brokers holding shares in “street name” do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement. If a beneficial owner of Company common stock held in “street name” does not give voting instructions to the applicable broker, then those shares will not be counted as present virtually or by proxy at the special meeting.

If you submit a proxy, regardless of the method you choose to submit such proxy, the individuals named on the enclosed proxy card, and each of them, with full power of substitution, will vote your shares of Company common stock in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify whether your shares of Company common stock should be voted for or against, or abstain from voting, on all, some or none of the specific items of business to come before the special meeting.

All shares represented by valid proxies that the Company receives through this solicitation, and that are not revoked, will be voted in accordance with your instructions on the proxy card. If you properly sign your proxy card but do not mark the boxes showing how your shares of Company common stock should be voted on a matter, the shares of Company common stock represented by your proxy will be voted in accordance with the recommendations of the Company board, which, as of the date of this proxy statement, are “FOR” the merger proposal, “FOR” the compensation proposal and “FOR” the adjournment proposal.

Please refer to the instructions on your proxy card or voting instruction card to determine the deadlines for submitting your proxy over the Internet or by telephone. If you choose to submit a proxy by mailing a proxy card, your proxy card should be mailed in the enclosed postage-paid return envelope and must be received by our Corporate Secretary by 5:00 p.m., Eastern Time, on August 3, 2021.

If you are a shareholder of record of shares of Company common stock, you may revoke a proxy by:

If you are a “street name” holder of shares of Company common stock, you may change your vote by submitting new voting instructions to your bank, broker or other holder of record or obtaining a legal proxy and voting in person at the special meeting. You must contact the record holder of your shares to obtain instructions as to how to change your proxy vote.

Although it is not currently expected, the special meeting may be adjourned or postponed for the purpose of soliciting additional proxies if there are insufficient votes at the time of the special meeting to approve the merger proposal. In the event that there is present, virtually or by proxy, sufficient favorable voting power to secure the vote of the Company shareholders necessary to approve the merger proposal, the Company does not anticipate that it will adjourn or postpone the special meeting, unless it is advised by counsel that such adjournment or postponement is necessary under applicable law to allow additional time for any disclosure. Any adjournment or postponement of the special meeting for the purpose of soliciting additional proxies will allow the Company shareholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned or postponed.

The Company is soliciting your proxy in conjunction with the merger. The Company will bear the cost of soliciting proxies from you. In addition to solicitation of proxies by mail, the Company will request that banks, brokers and other holders of record send proxies and proxy materials to the beneficial owners of Company common stock and secure their voting instructions.

On April 18, 2021, in connection with the merger agreement, Parent entered into a voting agreement (which we refer to as the “voting agreement”) with Red Mountain Partners, L.P. and Red Mountain Investors I LLC – Series A (which we refer to as, collectively, the “RM Parties”) pursuant to which the RM Parties have agreed, among other things, that with respect to all shares of Company common stock they beneficially own or that they may acquire beneficial ownership of after the date of the voting agreement (which we refer to as the “subject shares”): (a) when a meeting of the Company shareholders is held, they will appear at such meeting or otherwise cause their subject shares to be counted as present for the purpose of establishing a quorum and (b) they will vote or cause to be voted at any such meeting all of their subject shares (i) in favor of adopting the merger agreement and any other actions contemplated by the merger agreement in respect of which the approval of the Company shareholders is requested, (ii) in favor of adopting of any proposal in respect of which the Company board has (A) determined is reasonably necessary to facilitate any of the transactions contemplated by the merger agreement, (B) disclosed the determination described in the foregoing clause (A) in the proxy statement or other written materials disseminated to the holders of shares of Company common stock and (C) recommended to be adopted or approved by the holders of shares of Company common stock, and (iii) against (A) any acquisition proposal (as defined in “The Merger Agreement—Non-Solicitation of Acquisition Proposals”), whether or not constituting a superior proposal (as defined in “The Merger Agreement—Non-Solicitation of Acquisition Proposals”), and (B) any action, proposal, transaction or agreement that would reasonably be expected to prevent, impair, delay or otherwise interfere with the consummation of the merger or the other transactions contemplated by the merger agreement.

In addition, the RM Parties have agreed to not to, directly or indirectly (a) (i) transfer, or enter into any contract, option or other arrangement or understanding with respect to the transfer of, any subject shares to any person or entity, or (ii) enter into any voting arrangement, whether by proxy, voting agreement or otherwise, or grant a proxy or power of attorney with respect to any subject shares, or deposit any subject shares into a voting trust, or (b) (i) initiate, solicit or knowingly take any action to facilitate, solicit or encourage any acquisition proposal or the making of any proposal that would reasonably be expected to lead to an acquisition proposal or (ii) participate in any discussions or negotiations regarding, or furnish or provide any non-public information to any person or entity in connection with, any acquisition proposal; provided, that in the event a person or entity

submits an acquisition proposal to the Company, such holder and its representatives may hold discussions with such person or entity solely with respect to the terms of a proposed voting agreement with respect to the transaction contemplated by such acquisition proposal following such time as the Company determines that the Company board may take any of the actions permitted under the relevant provisions of the merger agreement.

Based solely on a Schedule 13D/A jointly filed on April 21, 2021 by the RM Parties and certain of its related persons, the RM Parties beneficially owned 2,956,925 shares of Company common stock, representing approximately 24.57% of the total outstanding shares of Company common stock as of the June 25, 2021 record date for the special meeting.

For further detail regarding the voting agreement, please refer to the section entitled “The Voting Agreement” and Annex D to this proxy statement.

If you have more questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact: Marlin Business Services Corp., Attn: Corporate Secretary, 300 Fellowship Road, Mount Laurel, New Jersey 08054, or by telephone at 888-479-9111.

If you hold your shares in “street name” through a bank, broker or other holder of record, please also contact your bank, broker or other holder of record for additional information.

This discussion of the merger is qualified in its entirety by reference to the merger agreement, which is attached to this proxy statement as Annex A. You should read the entire merger agreement carefully as it is the legal document that governs the merger.

The Company board has unanimously (a) determined and declared that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are fair to the shareholders of the Company and are in the best interests of the Company and the shareholders of the Company, (b) declared advisable and approved the merger agreement and the transactions contemplated by the merger agreement, including the merger and the De-Banking, and the execution, delivery and performance of the merger agreement and (c) recommended that the shareholders of the Company vote for the adoption of the merger agreement. Upon the terms and subject to the conditions set forth in the merger agreement, Merger Sub, a wholly owned subsidiary of Parent, will merge with and into the Company, with the Company surviving the merger as a wholly owned subsidiary of Parent. Upon the consummation of the merger, the separate corporate existence of Merger Sub will cease.

At the effective time, each share of Company common stock issued and outstanding immediately prior to the effective time (except for excluded shares) will be converted into the right to receive the merger consideration. For a discussion of the treatment of awards outstanding under the Company stock plans as of the effective time, see “The Merger Agreement—Treatment of Company Equity Awards.”

The Company shareholders are being asked to adopt the merger agreement. See “The Merger Agreement” for additional and more detailed information regarding the legal documents that govern the merger, including information about conditions to the consummation of the merger and provisions for terminating or amending the merger agreement.

Set forth below is a description of what we believe are the material aspects of the background and history of the merger. This description may not contain all the information that is important to you. The Company encourages you to read carefully the entire proxy statement, including the merger agreement attached as Annex A to this proxy statement, for a more complete understanding of the merger.

Senior management and the Company board periodically review and discuss the Company’s business strategy and prospects with the goal of maximizing shareholder value. In the course of these discussions, Company management and the Company board have periodically considered various strategic alternatives, including a possible sale of the Company. As the Company board evaluated these strategic alternatives, it considered various factors, including, but not limited to, the Company’s public valuation, liquidity for the Company’s shares in the public market, opportunities to take advantage of public capital markets and the Company’s underlying business performance. On various occasions in the past, the Company has received overtures from, and/or engaged in discussions with, various third parties related to a possible strategic transaction involving the Company. While some of these discussions were well-advanced, none of these discussions resulted in the Company entering into a definitive agreement with respect to, or otherwise consummating, a strategic transaction.

In June and July 2019, Jeffrey Hilzinger, the Company’s President and Chief Executive Officer, and the Company board discussed and considered various restructuring activities designed to improve the performance of the Company which were being explored by Company management, as well as other strategic alternatives, including a possible sale of the Company. As part of such discussions, the Company board determined that it was appropriate to explore a possible sale of the Company and to engage an investment banker to assist the Company in exploring such a potential transaction. In August 2019, the Company board determined to interview certain investment banks in connection with a potential sale of the Company, and directed Company management to arrange for meetings with such investment banks so that the Company board and Company management could conduct such interviews.

In September 2019, certain members of Company management, together with certain members of the Company board, met with representatives of J.P. Morgan and another investment bank to discuss the possibility of retaining a financial advisor in order to explore a possible sale of the Company.

On October 6, 2019, a meeting of the Company board was held at which the Company board unanimously approved (i) the commencement of a process designed to explore a potential sale of the Company and (ii) the engagement of J.P. Morgan as the Company’s financial advisor in connection with the exploration of a possible sale of the Company.

On October 18, 2019, the Company entered into an engagement letter with J.P. Morgan, which was subsequently ratified by the Company board on October 20, 2019.

In the fourth quarter of 2019, after J.P. Morgan was engaged as the Company’s financial advisor, J.P. Morgan and Company management started initial preparations for launching a sale process at the beginning of 2020. These initial preparations included contacting certain potential bidders who, in J.P. Morgan’s experience, would likely require additional time in order to participate in the sale process.

In early January 2020, J.P. Morgan, at the Company board’s direction, launched the sale process. J.P. Morgan contacted 38 parties about their interest in participating in the sale process. By the end of January 2020, 16 parties had indicated a willingness to participate in the sale process and executed a confidentiality agreement with the Company. Each of the confidentiality agreements signed by such parties contained customary provisions, including standstill provisions that, for a period of twelve to eighteen months, prohibit the counterparty, without the prior written consent of the Company board, from participating in a proposal for the Company either publicly or privately or from asking the Company to amend or waive such standstill provisions (often referred to as a “don’t ask, don’t waive” provision), except that, among other things, the counterparty may make proposals to the Company board on a confidential basis.

On February 13, 2020, five parties, including HPS, submitted first round bids. The first round bids indicated a non-binding purchase price range from $23.00 per share to $28.50 per share.

On February 18, 2020, a meeting of the Company board was held at which the Company board discussed the bids that had been received. The Company board determined to invite all five parties who had submitted first round bids to participate in the second round of the sale process.

By mid-March 2020, the COVID-19 pandemic was taking hold and impacting virtually all aspects of daily life, including the financial and lending markets. As it became clear that it would be difficult to successfully conclude a sale transaction under those circumstances without any adverse impact to price, on March 17, 2020, a decision was made to proactively suspend the sale process.

In the spring and summer of 2020, the Company faced unprecedented operating challenges and macro-economic uncertainty as a result of the COVID-19 pandemic. The Company’s initial focus was on working with existing customers to protect the value of its portfolio and limit the erosion of shareholder capital. The Company also temporarily tightened underwriting standards for areas of elevated risk, and took a series of actions to preserve its capital and liquidity. These actions included: (i) temporary re-allocation of resources from front-end origination activities to portfolio servicing and collection activities, (ii) cost reduction initiatives that led to a permanent reduction of approximately 80 employees and (iii) a re-organization of origination and processing platforms to accelerate automation and digitization.

On April 24, 2020, the Company’s common stock traded as low as $5.50 per share.

In mid-September 2020, HPS contacted J.P. Morgan about potentially acquiring the Company for a purchase price equal to the Company’s per share book value, which at that time was equivalent to approximately $15.00 per share, reflecting a substantial premium to the price at which the Company’s common stock was trading at that time. J.P. Morgan reported this expression of interest to the Company.

On October 21, 2020, a meeting of the Company board was held at which representatives of Mayer Brown LLP, the Company’s outside legal counsel (which we refer to as “Mayer Brown”), and J.P. Morgan were present. At this meeting, Michael Bogansky, Senior Vice President and Chief Financial Officer of the Company, provided a detailed overview of the Company’s 2021-2023 business plan. Later in the meeting, representatives of J.P. Morgan discussed macro-economic conditions as well as J.P. Morgan’s views on the Company’s 2021-2023 business plan. With this information, the members of the Company board then engaged in an extensive discussion as to whether it was prudent to commence discussions with HPS with respect to a potential sale transaction based on HPS’s orally expressed interest in potentially acquiring the Company for a purchase price equal to the Company’s per share book value. Representatives of Mayer Brown then provided legal advice

regarding the Company board’s duties and obligations in considering whether to engage further with HPS and, if the Company board chose to do so, its duties and obligations relating to that process. After further discussion, the Company board directed Company management to work with J.P. Morgan to engage on a limited basis with HPS to continue to inform them of the post-COVID plans the Company was undertaking.

On November 2, 2020, Willem Mesdag, Managing Partner of Red Mountain Capital Partners, LLC, the manager of funds owning approximately 25% of the outstanding shares of the Company (which funds we refer to collectively as “Red Mountain”), sent a letter to the Company board. J. Christopher Teets, a member of the Company board, is also a partner of Red Mountain. Prior to sending his letter, Mr. Mesdag had been informed by Mr. Hilzinger of HPS’s interest in a potential acquisition of the Company at book value. In his letter, Mr. Mesdag encouraged the Company board to pursue a possible transaction with HPS. In the letter Mr. Mesdag also stated that he was a Senior Advisor to HPS, but was not involved, either directly or indirectly, with HPS’s efforts to acquire the Company and had no interest in HPS’s potential acquisition of the Company other than Red Mountain’s interest as a shareholder of the Company. Mr. Mesdag also stated in his letter that Red Mountain would enthusiastically support a transaction with any buyer that was willing to pay a higher price than HPS for the Company.

On November 20, 2020, certain members of Company management provided a management presentation to HPS.

On December 4, 2020, Ryan Melcher, Senior Vice President and General Counsel of the Company, and a representative of Mayer Brown had a call with Mr. Mesdag regarding Mr. Mesdag’s relationship with HPS. Mr. Mesdag explained on the call that his relationship with HPS began in May 2019 and stemmed from his relationship with HPS’s Chief Executive Officer, who Mr. Mesdag knew professionally. Mr. Mesdag then said that he had no role in HPS’s interest in or evaluation of the Company. Mr. Mesdag also explained that his compensation from HPS was in no way tied to or affected by HPS’s pursuit or consummation of an acquisition of the Company.

On December 14, 2020, HPS delivered a non-binding written offer to purchase all of the Company’s issued and outstanding shares of common stock for $16.75 per share.

On December 24, 2020 a meeting of the Company board was held at which representatives of Mayer Brown and J.P. Morgan were present. As an initial matter, Mr. Melcher and a representative of Mayer Brown summarized to the Company board Mr. Mesdag’s relationship with HPS, based on the information they received on their call with Mr. Mesdag. After discussion, the Company board instructed Mr. Melcher and Mayer Brown to pursue, and authorized the Company to execute, a confidentiality agreement with Red Mountain and implement other appropriate mechanisms to ensure that neither Red Mountain nor Mr. Mesdag shared with HPS any information regarding any strategic process undertaken by the Company. Representatives of J.P. Morgan then provided the Company board with a presentation with respect to, among other things, the macro-economic environment, the state of the M&A market for banks, the terms and conditions of the HPS offer, the Company’s valuation, the universe of potential buyers for the Company, and a proposed timeline for a renewed sale process. Various directors asked various questions of J.P. Morgan. After discussion, the Company board determined that the Company should not pursue the HPS offer at this time. Rather, the Company board tentatively decided to renew the process designed to explore a potential sale of the Company after the Company released its fourth quarter 2020 earnings in late January 2021. The Company board noted that it had a regularly scheduled meeting in January 2021, at which time it could review the current state of the market and make a final determination as to whether to renew such a process.

In early January 2021, J.P. Morgan requested changes to the economic terms of J.P. Morgan’s engagement, including an increased contingent fee payable to J.P. Morgan based on the consideration paid in a sale of the Company which arose as a result of the steep reduction in the price of shares of Company common stock spurred by the COVID-19 pandemic since the parties entered into such engagement in October 2019. Company management and J.P. Morgan thereafter entered into discussions with respect to such requested changes. Company management periodically updated the Company board as to the status of such discussions.

On January 14, 2021, Mayer Brown delivered a draft of a confidentiality agreement with Red Mountain (which we refer to as the “Red Mountain NDA”) to Munger, Tolles & Olson LLP (which we refer to as “MTO”), counsel to Red Mountain. The Red Mountain NDA contemplated, among other things, (i) customary confidentiality and non-disclosure obligations of Red Mountain with respect to the proprietary information of the

Company and (ii) that Red Mountain would institute walling procedures (which we refer to as the “walling procedures”) within its organization to prevent the disclosure of information regarding the Company or the sale process to Mr. Mesdag and to prevent Mr. Mesdag from being given access to any such information.

From January 14, 2021 through February 25, 2021, Mayer Brown and MTO negotiated and finalized the terms of the Red Mountain NDA.

On January 20, 2021, a regularly scheduled meeting of the Company board was held at which representatives of Mayer Brown and J.P. Morgan were present. At such meeting, the representatives of J.P. Morgan provided the Company board a presentation regarding the performance of the Company’s stock price since the Company board’s December 24, 2020 meeting, industry developments and the potential impact of the recently announced economic stimulus package on the economy. The representatives of J.P. Morgan also discussed with the Company board the possible bidders in a renewed sale process, including HPS, and the proposed strategy on outreach to such possible bidders should the Company board determine to renew the sale process. After discussion and deliberation, the Company board determined to renew the process to explore a potential sale of the Company, authorized J.P. Morgan to contact potential bidders, 13 of which participated in the initial 2020 sale process (including HPS), and instructed J.P. Morgan to renew the sale process and commence the outreach to potential bidders. On February 1, 2021, J.P. Morgan commenced outreach to 17 potential bidders, including HPS, as authorized by the Company board.

Between February 3, 2021 and February 16, 2021, the Company negotiated and executed confidentiality agreements with Party A, Party B and Party C and amendments to the existing confidentiality agreements with HPS, Party D and Party E which were entered into in connection with the initial sale process, which amendment with respect to HPS’s confidentiality agreement, among other things, extended confidentiality, standstill and non-solicitation obligations under its existing confidentiality agreement with the Company entered into in the initial sale process for a period of two years, 18 months and one year, respectively, from the date the amendment was signed. The amendments to the confidentiality agreements with Party D and Party E were on substantially similar terms as the amendment executed by HPS. Each of the confidentiality agreements signed by such participants contained customary provisions, including standstill provisions that, for a period of twelve to eighteen months, prohibit the counterparty, without the prior written consent of the Company board, from participating in a proposal for the Company either publicly or privately or from asking the Company to amend or waive such standstill provisions (often referred to as a “don’t ask, don’t waive” provision), except that, among other things, the counterparty may make proposals to the Company board on a confidential basis. Each of Party B, Party D and Party A were bank holding companies subject to banking regulations, and each of HPS, Party C and Party E were financial sponsors not subject to banking regulations.

Between February 11, 2021 and February 16, 2021, J.P. Morgan, on behalf of the Company, (i) delivered to each of the six potential bidders participating in the sale process, including HPS, a confidential information memorandum with information regarding the Company and a process letter requesting that indications of interest to acquire the Company be submitted by the end of February 2021 and (ii) provided each of the participants in the sale process access to limited due diligence materials regarding the Company and its businesses via an online virtual data room.

On February 19, 2021, Party D informed J.P. Morgan that it was no longer interested in acquiring the Company or participating in the sale process.

On February 23, 2021, HPS submitted an indication of interest containing a proposal to acquire the Company for $22.50 per share in cash. HPS’s indication of interest also indicated that a transaction with HPS would require the Company to, as a condition to closing, effect the De-Banking.

On February 24, 2021, as a result of the prior discussions between Company management and J.P. Morgan and following prior presentations to the Company board by Company management regarding the terms of J.P. Morgan’s engagement, Mr. Bogansky provided the Company board an update via email regarding a proposed amendment to J.P. Morgan’s engagement letter which reflected changes to the economic terms of J.P. Morgan’s engagement, including an increased contingent fee payable to J.P. Morgan based on the consideration paid in a sale of the Company which arose as a result of the steep reduction in the price of shares of Company common stock spurred by the COVID-19 pandemic since the parties entered into such engagement in October 2019. After discussion and deliberation, the Company board approved such changed economic terms and authorized Company management to execute an amendment to J.P. Morgan’s engagement letter reflecting such terms.

On February 25, 2021, the Company and Red Mountain executed the Red Mountain NDA and Red Mountain implemented the walling procedures.

Also, on February 25, 2021, the Company and J.P. Morgan executed an amendment to J.P. Morgan’s engagement letter (which we refer to as the “JPM amendment”) which reflected changed economic terms consistent with those described to the Company board by Mr. Bogansky via e-mail on February 24, 2021.

Later on February 25, 2021, Party A submitted an indication of interest containing a proposal to acquire the Company for a price in the range of $16.10 to $18.12 per share in cash.

On February 26, 2021, given that HPS and the other financial sponsors included among the bidders were not bank holding companies or otherwise subject to bank regulation, the Company began to explore a potential De-Banking through a possible sale of MBB and, at the Company management’s instruction, J.P. Morgan preliminarily contacted Party F about its interest in potentially acquiring MBB.

By February 28, 2021, all potential bidders other than HPS, Party A and Party F had informed J.P. Morgan that they were no longer interested in acquiring the Company or otherwise participating in the sale process.

On March 1, 2021, the Company board held a meeting at which representatives of Mayer Brown were present. At the outset of the meeting, Messrs. Bogansky and Melcher summarized the terms of the JPM amendment for the Company board and the Company board ratified the execution of the amendment by Company management. Representatives of J.P. Morgan then joined the March 1, 2021 board meeting. During the meeting, representatives of J.P. Morgan updated the Company board on the status of the sale process, including the outreach to Party F, and provided a summary of the financial terms of the two indications of interest that had been received from HPS and Party A. As part of such discussion, the representatives of J.P. Morgan described the other terms of HPS’s indication of interest, which conditioned the potential transaction on the consummation of the De-Banking, and the representatives of J.P. Morgan provided a general description for the Company board of the steps required to effect the De-Banking. After a review and discussion with the assistance of representatives of J.P. Morgan, the Company board directed that the two potential buyers, including HPS, that had delivered indications of interest be invited to participate in the next stage of the sale process, which would include further management presentations, and instructed Company management to explore a possible sale of MBB to Party F in connection with the De-Banking required for a sale transaction with HPS.

Later on March 1, 2021, Party F executed a confidentiality agreement with the Company on terms substantially similar to those entered into by the other bidders in the sale process. The confidentiality agreement signed by Party F contained customary provisions, including standstill provisions that, for a period of two years, prohibit Party F, without the prior written consent of the Company board, from participating in a proposal for the Company either publicly or privately or from asking the Company to amend or waive such standstill provisions (often referred to as a “don’t ask, don’t waive” provision), except that, among other things, Party F may make proposals to the Company board on a confidential basis.

On March 8, 2021, Mr. Hilzinger and other members of Company management gave a further management presentation to representatives of HPS.

On March 9, 2021, J.P. Morgan delivered a process letter on behalf of the Company to the remaining bidders requesting that their final indications of interest to acquire the Company be submitted by March 29, 2021.

Later on March 9, 2021, Mr. Hilzinger and other members of Company management gave a management presentation to representatives of Party A.

On March 12, 2021, Party A informed J.P. Morgan that it was no longer interested in acquiring the Company or participating in the sale process.

Later on March 12, 2021, J.P. Morgan delivered the initial draft of the merger agreement, which had been prepared by Mayer Brown, to HPS on behalf of the Company.

On March 16, 2021, Mr. Teets received an unsolicited inquiry regarding a potential acquisition of the Company from a representative of a potential strategic acquirer on a no-names basis, which Mr. Teets relayed to Lawrence DeAngelo, the chairman of the Company board, and J.P. Morgan. The person who contacted Mr. Teets was an investment banker representing such strategic acquirer and an acquaintance of Mr. Teets who knew that Mr. Teets was a member of the Company board. Mr. Teets was not aware of the identity of such strategic acquirer and

such investment banker did not disclose the identity of such strategic acquirer to Mr. Teets. In addition, there was no indication that such investment banker knew a process exploring a potential sale of the Company was under way. Later that day, at the direction of the Company, representatives of J.P. Morgan contacted the representative of such strategic acquirer, who indicated that, based on publicly available information, the strategic acquirer was interested in acquiring the Company for a price of $21.00 – $22.00 per share. The representatives of J.P. Morgan indicated that the Company may be interested in pursuing such a transaction, but that the Company would need to know the identity of the potential strategic acquirer before proceeding any further, and the representative of the strategic acquirer indicated they would get back to J.P. Morgan with that information. Following such discussion, the representative did not provide the identity of the potential strategic acquirer. It was later determined that the representative was contacting the Company on behalf of Party G.

On March 17, 2021, at the direction of the Company, representatives of J.P. Morgan and HPS had a conference call to discuss HPS’s anticipated approach and goals with respect to the De-Banking. On the call, HPS also confirmed that it was on track to deliver its final indication of interest on March 29, 2021.

Later on March 17, 2021, Party F informed J.P. Morgan that it was no longer interested in acquiring MBB.

On March 22, 2021, representatives of J.P. Morgan were contacted by representatives of Party G to inquire about exploring a potential acquisition of the Company by Party G. Party G was aware that J.P. Morgan was running an exploratory sale process on behalf of the Company, since J.P. Morgan had contacted Party G’s representative on March 16, 2021 in response to the inbound inquiry received by Mr. Teets. The representatives of J.P. Morgan indicated that Party G should deliver a non-binding indication of interest, based on publicly available information, to acquire the Company. Later that day, the representatives of J.P. Morgan provided Company management and Mr. DeAngelo an update regarding the outreach by the representatives of Party G regarding a potential acquisition of the Company.

On March 23, 2021, J.P. Morgan received an indication of interest from Party G which contained a proposal to acquire the Company for a price of $20.00 – $22.00 per share, consisting of 50% cash and 50% Party G stock, which indication of interest was based on publicly available information. Furthermore, unlike HPS’s proposal, which would require the De-Banking to be consummated as a condition to closing, Party G’s proposal would not require a dissolution of MBB’s bank charter, but rather would require that Party G obtain all regulatory approvals required for it to own and operate MBB.

On March 24, 2021, the Company board held a meeting at which representatives of Mayer Brown and J.P. Morgan were present. The representatives of J.P. Morgan summarized the terms of Party G’s indication of interest and provided a general description of the regulatory approvals and process that would be required for Party G to obtain all of the clearances required for it to own and operate a bank. The representatives of J.P. Morgan and Mr. Melcher then provided a general description of the De-Banking that would be required in connection with a transaction with HPS. The representatives of J.P. Morgan also discussed their views of Party G’s viability as a bidder. After discussion and deliberation, the Company board determined to allow Party G to participate in the sale process and be provided due diligence materials and information, and instructed J.P. Morgan to give Party G access to the virtual data room, in each case upon execution of a confidentiality agreement acceptable to the Company, and request that Party G provide a revised and improved bid by March 31, 2021 in light of the fact that HPS was expected to provide its final bid by March 29, 2021.

On March 25, 2021, Party G executed a confidentiality agreement with the Company on terms substantially similar to those entered into by the other bidders in the sale process and was provided access to due diligence materials in the online virtual data room. The confidentiality agreement signed by Party G contained customary provisions, including standstill provisions that, for a period of two years, prohibit Party G, without the prior written consent of the Company board, from participating in a proposal for the Company either publicly or privately or from asking the Company to amend or waive such standstill provisions (often referred to as a “don’t ask, don’t waive” provision), except that, among other things, Party G may make proposals to the Company board on a confidential basis.

On March 29, 2021, HPS submitted a revised indication of interest containing a proposal to acquire the Company for $22.50 per share in cash and requested that the Company provide it with exclusivity in order to proceed with the next stage of negotiations. HPS’s indication of interest proposed a Company termination fee

equal to 4% of the equity value of the transaction and assumed that the Company’s fees and expenses in connection with the transaction, including in connection with consummating the De-Banking, would not exceed $5.0 million. In addition, HPS’s indication of interest included a markup of the draft merger agreement.

On March 31, 2021, Party G submitted a revised indication of interest containing a proposal to acquire the Company for $20.80 per share, consisting of 50% cash and 50% Party G stock.

Later on March 31, 2021, the Company board held a meeting at which representatives of Mayer Brown and J.P. Morgan were present to, among other things, consider the indications of interest received from HPS and Party G. Representatives of J.P. Morgan summarized the terms of each of the indications of interest received and provided a general description of the regulatory approvals necessary for and the steps needed to execute the De-Banking contemplated by HPS’s bid and obtaining the clearances and licenses necessary for Party G to own and operate a bank. A representative of Mayer Brown then summarized the changes proposed by HPS in its markup of the draft merger agreement, including the addition of closing conditions regarding the consummation of the De-Banking and obtaining state licenses to run the Company’s business following the closing, as well as HPS’s desire that Red Mountain execute a voting agreement with respect to the proposed transaction (which we refer to as the “voting agreement”). After discussion and deliberation, the Company board determined it was premature to provide HPS with exclusivity and that, in order for the Company to provide HPS the exclusivity it requested, HPS would need to increase its proposed purchase price and provide additional specificity with respect to what terms HPS was prepared to accept with respect to the De-Banking. The Company board instructed J.P. Morgan to request that each of HPS and Party G increase their purchase price and that Party G increase the percentage of cash consideration in its offer, and instructed Mayer Brown to prepare an issues list outlining, for purposes of discussion with HPS, the Company’s positions on certain material issues reflected in HPS’s markup of the draft merger agreement.

On April 1, 2021, Mayer Brown prepared and circulated to Company management and the Company board an issues list outlining the Company’s positions on certain material terms of HPS’s markup of the draft merger agreement, which issues list reflected, among other things, (i) that HPS’s purchase price would only be adjusted with respect to costs and expenses incurred by the Company solely in connection with the De-Banking and only to the extent that such costs and expenses were in excess of $15 million, (ii) the Company’s general proposal on a construct for a De-Banking covenant and (iii) that the Company termination fee should equal 3% of the equity value of the transaction.

Later on April 1, 2021, J.P. Morgan delivered the issues list to HPS.

On April 2, 2021, representatives of J.P. Morgan contacted HPS, on behalf of the Company, and requested that HPS increase its price above its proposed price of $22.50 per share and discussed the terms presented on the issues list. The representatives of J.P. Morgan indicated, at the instruction of the Company board, that the Company would not enter into exclusivity with HPS unless HPS increased its price and the Company and HPS came to terms on the issues described in the issues list.

Later on April 2, 2021, representatives of J.P. Morgan contacted Party G, on behalf of the Company, and requested that Party G increase its price above its proposed price of $20.80 per share and otherwise improve its bid, including to increase the portion of consideration constituting cash, given that Party G had lowered its proposed purchase price from the high end of the range indicated in its initial bid and was the only bidder offering stock as part of the mix of consideration.

On April 4, 2021, HPS delivered an updated issues list reflecting HPS’s positions on the terms of the draft merger agreement specified by the Company in its initial issues list, which updated issues list reflected, among other things, (i) HPS’s agreement, subject to certain conditions, to the purchase price adjustment concept and general De-Banking covenant proposed by the Company and (ii) that the Company termination fee should equal 3.5% of the equity value of the transaction. In addition, HPS confirmed to J.P. Morgan that it was unwilling to provide an increase to its proposed purchase price.

On April 5, 2021, Party G submitted a further revised indication of interest containing a proposal to acquire the Company for $22.00 per share, consisting of 70% cash and 30% Party G stock.

Also on April 5, 2021, representatives of J.P. Morgan had a conference call with Messrs. DeAngelo, Hilzinger, Bogansky and Melcher and representatives of Mayer Brown to discuss the status of discussions with each of HPS and Party G. After discussion, Messrs. DeAngelo and Hilzinger instructed (i) J.P. Morgan to contact Party G

and indicate to them that if Party G wanted to continue in the sale process, it would need to submit a further improved bid prior to the Company board meeting scheduled for the afternoon of April 6, 2021 and (ii) Mayer Brown to prepare an exclusivity agreement for HPS’s consideration in the event the Company board determined to provide HPS with exclusivity.

Later on April 5, 2021, J.P. Morgan, as instructed by Messrs. DeAngelo and Hilzinger, indicated to representatives of Party G that Party G would need to submit a further improved bid prior to the Company board meeting scheduled for the afternoon of April 6, 2021 if it wanted to continue in the sale process. In such discussions, representatives of Party G noted to J.P. Morgan that Party G’s financial models were already at their limits with a 70:30 split of cash to stock.

Also on April 5, 2021, Mayer Brown prepared a draft of an exclusivity agreement with HPS and provided the draft to representatives of J.P. Morgan, who then provided it to HPS.

On April 6, 2021, representatives of HPS contacted J.P. Morgan and told them that HPS was prepared to increase its price to $23.00 per share if the Company signed an exclusivity agreement with HPS that day.

During the course of April 6, 2021, Mayer Brown and Skadden, Arps, Slate, Meagher & Flom LLP, counsel to HPS (which we refer to as “Skadden”), negotiated and finalized the terms of the exclusivity agreement.

Party G did not contact J.P. Morgan regarding a further revised indication of interest at any point on April 5 or April 6, 2021.

Later on April 6, 2021, the Company board held a meeting at which representatives of Mayer Brown and J.P. Morgan were present to, among other things, consider the terms proposed by HPS and Party G and determine whether to provide exclusivity to HPS. Representatives of J.P. Morgan then provided the Company board an update on developments since the March 31, 2021 meeting and summarized the terms of each of the indications of interest received, including (i) the resolution of the matters specified on the issues list with HPS and HPS’s increase in price to $23.00 per share, and (ii) the fact that Party G had not returned with a revised proposal after having been asked to do so ahead of the Company board meeting. After discussion and deliberation and consideration of the proposals made by both HPS and Party G, the Company board determined to provide exclusivity to HPS and authorized and approved the Company’s entry into an exclusivity agreement with HPS.

In the evening of April 6, 2021, the Company and HPS executed the exclusivity agreement which contemplated that the Company would provide HPS exclusivity through April 19, 2021.

On April 7, 2021, a representative of Party G contacted J.P. Morgan via email requesting a call with J.P. Morgan. In accordance with the Company’s obligations under the exclusivity agreement with HPS, a representative of J.P. Morgan then called the representative of Party G and indicated that the Company and J.P. Morgan would not be able to engage or otherwise discuss any proposal regarding a sale of the Company with Party G or any of its representatives.

Later on April 7, 2021, Party G delivered to J.P. Morgan an unsolicited proposal to acquire the Company for $25.00 per share in cash (which we refer to as the “Party G proposal”).

On April 8, 2021, in accordance with the Company’s obligations under the exclusivity agreement with HPS, J.P. Morgan notified representatives of Party G by email that the Company and J.P. Morgan would not be able to engage with Party G or otherwise discuss the Party G proposal. Later that day, in accordance with the Company’s obligations under the exclusivity agreement with HPS, J.P. Morgan notified HPS of the existence of the Party G proposal and provided HPS a summary of the material terms of such proposal, including the price of $25.00 per share in cash.

Later on April 8, 2021, representatives of Mayer Brown and Skadden had a conference call to discuss, among other things, the parties’ anticipated approach with respect to and terms regarding the De-Banking in the merger agreement.

On April 9, 2021, the Company board held a meeting at which representatives of Mayer Brown and J.P. Morgan were present to, among other things, consider the Party G proposal. Representatives of J.P. Morgan provided the Company board an update on developments since the April 6, 2021 meeting and summarized the terms of the Party G proposal. The Company board then discussed, in consultation with its advisors, the likelihood and risk that a transaction with Party G would not be consummated, the timing in which such a transaction would likely

be consummated, if at all, and the likelihood that Party G would have the ability or resources to support a $25.00 per share price in cash, including, among other things, that (i) the acquisition by Party G would require Party G to obtain prior approval of the Federal Reserve Board to become a bank holding company, which would involve a comprehensive and lengthy application process and review by the Federal Reserve Board of Party G, its financial and managerial resources, its future prospects, its record of compliance with applicable laws and regulations, and its stated objective to expand MBB into retail banking, (ii) Party G was at a relatively early stage in the development of its plans and preparedness to make such an application and become a bank holding company, (iii) applications by nonbanking organizations, such as fintech companies, to become bank holding companies tend to be time-consuming, complex and challenging, with uncertain prospects of approval, (iv) even if Party G were able to obtain such required regulatory approvals, the process to do so would likely take materially longer than executing the De-Banking, (v) based on Party G’s publicly available financial information and consultation with the Company’s financial advisors, the Company board believed there was a significant risk that Party G would not be able to finance a purchase price of $25.00 per share, (vi) representatives of Party G had previously stated on April 5, 2021 that Party G’s financial models were already at their limits at a $22.00 per share purchase price with a 70:30 split of cash to stock (we refer to the foregoing clause (v) and this clause (vi), together, as the “Party G financing risk factors”), (vii) Party G had not completed its due diligence of the Company to support its $25.00 per share price and that, after engaging in further due diligence of the Company, Party G may have decreased its proposed purchase price, and (viii) Party G’s due diligence review of and discussions with the Company were not as advanced as those of HPS and, as a result, pursuing a transaction with Party G would require substantially more time to reach signing than a transaction with HPS (we refer to the foregoing clauses (i) through (viii) as the “Party G risk factors”). After deliberation and discussion, the Company board determined to continue pursuing a transaction with HPS but instructed J.P. Morgan to request an increase in HPS’s purchase price in light of the Party G proposal.

Also on April 9, 2021, representatives of J.P. Morgan contacted HPS on behalf of the Company and requested that HPS increase its price above its proposed price of $23.00 per share.

Later on April 9, 2021, Mayer Brown sent a mark-up of the draft merger agreement to Skadden.

On April 12, 2021, Mayer Brown and Skadden sent a draft of the voting agreement to MTO. After receipt of the draft voting agreement, a representative of MTO noted to Mayer Brown that the walling procedures prevent Mr. Mesdag from being apprised of the terms of the draft voting agreement and that, since Mr. Mesdag was the appropriate person within Red Mountain to execute the voting agreement, the Company board would need to waive the terms of or otherwise terminate the walling procedures in order to allow Mr. Mesdag to review the terms of and execute the voting agreement concurrently with a potential signing of the merger agreement with HPS.

Later on April 12, 2021, (i) Skadden sent a mark-up of the draft merger agreement and voting agreement, and initial drafts of the equity commitment letter and limited guarantee to Mayer Brown and (ii) Mayer Brown sent an initial draft of the Company disclosure letter to Skadden.

On April 13, 2021, Mayer Brown sent a mark-up of the draft merger agreement to Skadden.

Later on April 13, 2021, representatives of HPS contacted J.P. Morgan and confirmed that HPS was prepared to increase its purchase price to $23.50 per share.

Also on April 13, 2021, representatives of J.P. Morgan had a conference call with Messrs. DeAngelo, Hilzinger, Bogansky and Melcher and representatives of Mayer Brown to discuss HPS’s increase of the purchase price to $23.50 per share. After discussion, Messrs. DeAngelo and Hilzinger instructed J.P. Morgan to request a further price increase of at least an additional $0.25 per share from HPS.

On April 14, 2021, representatives of J.P. Morgan contacted HPS and requested that HPS increase its price above its proposed price of $23.50 per share.

Later on April 14, 2021, MTO sent a mark-up of the voting agreement to Skadden.

On April 15, 2021, representatives of HPS contacted representatives of J.P. Morgan to inform them that HPS would not increase its price of $23.50 per share and that such price was its best and final offer.

Later on April 15, 2021, representatives of J.P. Morgan had a conference call with Messrs. DeAngelo, Hilzinger, Bogansky and Melcher and representatives of Mayer Brown to discuss HPS’s confirmation that it was not willing

to increase its price above $23.50 per share. After discussion, Messrs. DeAngelo and Hilzinger instructed J.P. Morgan not to request any further price increases from HPS pending discussion and deliberation by the Company board with respect to the potential merger with HPS to be undertaken at a Board meeting scheduled for April 16, 2021.

Also on April 15, 2021, (i) Skadden and MTO finalized the terms of the voting agreement, (ii) Skadden sent a mark-up of the draft merger agreement to Mayer Brown and (iii) Mayer Brown sent mark-ups of the equity commitment letter and the limited guarantee to Skadden.

On April 16, 2021, Mayer Brown had a conference call with Skadden to negotiate terms of the merger agreement, the equity commitment letter and the limited guarantee. During the call, the representatives of Mayer Brown and Skadden discussed, among other things, (i) what would constitute a De-Banking for purposes of the merger agreement, (ii) the Company’s covenants with respect to the De-Banking and (iii) the Company’s obligations to cooperate with Parent in obtaining any necessary state licenses during the interim period between signing and closing needed to operate the Company’s businesses following the effective time and the consummation of the De-Banking.

From April 14, 2021 through April 16, 2021, the representatives of Mayer Brown and Skadden finalized the terms of the merger agreement, the Company disclosure letter, the Parent disclosure letter, the equity commitment letter and the limited guarantee.

Later on April 16, 2021, the Company board held a meeting at which representatives of Mayer Brown and Morgan, Lewis & Bockius LLP, the Company’s outside Pennsylvania counsel (which we refer to as “Morgan Lewis”), were initially present to, among other things, consider the proposed merger with HPS at a price of $23.50 per share. A representative of Morgan Lewis reviewed with the members of the Company board their fiduciary duties under Pennsylvania law. Representatives of J.P. Morgan and Chain Bridge Partners, LLC, bank regulatory advisor to the Company (which we refer to as “Chain Bridge”), then joined the meeting. A representative of Chain Bridge and Mr. Bogansky then provided the Company board an overview of the De-Banking process, including a description of the regulatory approvals required to execute the De-Banking and the steps that would need to be taken to pay off or otherwise liquidate MBB’s deposits as part of that process. Messrs. Hilzinger and Bogansky then provided the Company board an overview of the Company’s financial performance in the first quarter of 2021 and provided to the Company board an update on recent developments and trends in the Company’s business. Mr. Hilzinger then described Company management’s opinion of the transaction with HPS and noted that Company management, in light of their knowledge of the Company’s business, were in favor of pursuing the transaction with HPS. Thereafter, representatives of J.P. Morgan reviewed, with the Company board, the history of the first and second sale processes, including developments with respect to HPS and Party G. At the request of the Company board, representatives of J.P. Morgan then reviewed with the Company board their preliminary financial analyses with respect to the Company and the proposed merger. Mayer Brown provided the Company board with both a written and an oral summary of the key terms of the merger agreement, equity commitment letter and limited guarantee, noting any items in such documents that remained to be resolved. A representative of Mayer Brown then noted to the Company board that HPS was seeking to enter into the voting agreement with Red Mountain and summarized the key terms of the voting agreement. The representative of Mayer Brown then explained to the Company board that MTO had indicated that, in order for Red Mountain to execute the voting agreement concurrently with a potential signing of the merger agreement, the Company board would need to authorize the termination of the walling procedures in accordance with their terms to allow Mr. Mesdag the time and opportunity to consider the terms of the voting agreement prior to its execution. Following discussion and consideration of the transaction with HPS, the Company board authorized the termination of the walling procedures.

On April 17, 2021, representatives of Mayer Brown had various calls with representatives of Skadden to negotiate terms of the merger agreement. During such calls, Mayer Brown and Skadden discussed, among other things, what would constitute a De-Banking for purposes of the merger agreement.

On April 18, 2021, the Company board held a meeting at which representatives of Mayer Brown, J.P. Morgan and Morgan Lewis were present to, among other things, consider the proposed merger with HPS. A representative of Mayer Brown reviewed with the Company board the resolution of the issues in the merger agreement and other transaction documents that had been unresolved as of the time of the meeting of the Company board on April 16, 2021. At the request of the Company board, representatives of J.P. Morgan

reviewed with the Company board J.P. Morgan’s financial analyses with respect to the Company and the proposed merger. Thereafter, at the request of the Company board, J.P. Morgan rendered its oral opinion to the Company board (which was subsequently confirmed in writing by delivery of J.P. Morgan’s written opinion dated April 18, 2021) to the effect that, as of April 18, 2021, and based upon and subject to certain assumptions, qualifications, limitations and other matters considered in connection with the preparation of the opinion, the merger consideration of $23.50 to be received by the holders of shares of the Company common stock in the merger pursuant to the merger agreement was fair, from a financial point of view, to such holders. The Company board then discussed and deliberated with respect to the transaction with HPS, including discussion of the Party G proposal. In discussing the Party G proposal, the Company board considered, among other things, each of the Party G risk factors and the likelihood and risk that the transaction with Party G would not be consummated, the timing in which such a transaction would be consummated, and determined, in consultation with the Company’s advisors and Company management, that proceeding with a transaction with HPS on the terms negotiated by the Company and HPS was preferable to a transaction with Party G because (i) proceeding with Party G entailed a greater deal of regulatory risk since Party G would need to obtain all of the requisite regulatory approvals to own and operate a bank in order to close on an acquisition of the Company whereas the transaction with HPS would only require the De-Banking, the achievement of which the Company board believed, in consultation with the Company’s legal, regulatory and financial advisors, to be much more certain and faster than obtaining the regulatory approvals Party G would require and (ii) proceeding with Party G entailed greater transaction execution risk since (x) Party G had not completed its due diligence of the Company to support its $25.00 per share price whereas HPS had conducted extensive due diligence on the Company to support its price and (y) in considering the Party G financial risk factors in consultation with the Company’s financial advisors, the Company board did not believe that Party G would be able to finance a purchase price of $25.00 per share whereas HPS had demonstrated and the Company board believed, after consultation with the Company’s financial advisors, that HPS had sufficient financial resources to consummate an acquisition of the Company at a purchase price of $23.50 per share. After such discussion and deliberation, the Company board then unanimously (a) determined and declared that the merger agreement and the transactions contemplated by the merger agreement, including the merger, were fair to the shareholders of the Company and were in the best interests of the Company and the shareholders of the Company, (b) declared advisable and approved the merger agreement and the transactions contemplated by the merger agreement, including the merger and the De-Banking, and the execution, delivery and performance of the merger agreement and (c) recommended that the shareholders of the Company vote for the adoption of the merger agreement.

Later in the afternoon on April 18, 2021, the Company, Parent and Merger Sub executed the merger agreement and Parent and Red Mountain executed the voting agreement.

Prior to the opening of trading on Nasdaq on April 19, 2021, the Company issued a press release announcing entry into the merger agreement.

Later on April 19, 2021, representatives of Party G contacted representatives of J.P. Morgan to inquire about exploring a potential acquisition of MBB (which we refer to as the “potential post-signing Party G sale”).

Also on April 19, 2021, representatives of J.P. Morgan provided an update to Company management, certain members of the Company board and Mayer Brown regarding outreach by representatives of Party G and described Party G’s proposal regarding the potential post-signing Party G sale. After discussion, the previously referenced members of the Company board instructed Company management to discuss Party G’s proposal with HPS and the possibility of pursuing the potential post-signing Party G sale and, if HPS indicated it was open to pursuing the potential post-signing Party G sale, directed Company management and J.P. Morgan to engage in discussions with Party G regarding the potential post-signing Party G sale.

On April 21, 2021, Mr. Hilzinger discussed Party G’s proposal and the potential post-signing Party G sale with representatives of HPS, and the representatives of HPS indicated that HPS was open to exploring the potential post-signing Party G sale with Party G and the Company.

Between April 21, 2021 and April 27, 2021, representatives of the Company, HPS, Party G and J.P. Morgan engaged in various discussions regarding the potential post-signing Party G sale, including preliminary structuring and timing considerations, and the Company provided further due diligence materials regarding MBB to Party G.

On April 28, 2021, Party G submitted an indication of interest with respect to the potential post-signing Party G sale which reflected a proposal to acquire MBB from the Company for $70 million.

Between April 28, 2021 and May 24, 2021, representatives of the Company (including representatives of J.P. Morgan) and Party G engaged in various negotiations regarding the proposed terms of the potential post-signing Party G sale and preliminarily settled on the following terms for such sale, subject to the completion of due diligence and the negotiation and finalization of definitive transaction agreements: (a) Party G would pay $70 million for MBB and (b) the Company could, in parallel with Party G’s efforts to obtain the requisite regulatory approvals to acquire MBB, position itself to accelerate the De-Banking contemplated by the merger agreement should a definitive agreement to sell MBB to Party G be terminated prior to closing of the potential post-signing Party G sale, in which case Party G would reimburse the surviving corporation up to $8 million for expenses incurred in connection with such De-Banking. At the same time, representatives of the Company (including representatives of J.P. Morgan) and HPS engaged in various negotiations regarding the manner in which the consideration paid by Party G for MBB would be split between the Company’s shareholders, on the one hand, and HPS and the surviving corporation, on the other hand. During the course of these discussions, it was determined that the sale of MBB to Party G would be a taxable event, resulting in double taxation for Company shareholders. Ultimately, the Company and HPS had preliminarily settled on a split of the consideration such that, of the $70 million to be paid by Party G, 45% would be retained by HPS and the surviving corporation while 55% or $2.65 per share (on an after tax basis assuming a 25% tax rate) would be paid to Company shareholders by increasing the per share merger consideration from $23.50 to $26.15.

On May 20, 2021, HPS granted the Company an extension to the deadline under the merger agreement by which the Company must file this proxy statement from May 21, 2021 to June 15, 2021. Such extension was granted to allow the Company and HPS additional time to explore the potential post-signing Party G sale.

Between May 24, 2021 and June 4, 2021, the Company, in consultation with its advisors including Chain Bridge, and HPS engaged in reverse due diligence (which we refer to as the “reverse due diligence”) of the likelihood that Party G’s application to become a bank holding company would be approved by the applicable federal and state regulators and, if approved, the likely timing of when such approvals would be received. In particular, on June 1, 2021, Party G management provided a management presentation to certain members of Company management, J.P. Morgan, Chain Bridge, HPS and Skadden regarding the likelihood and timing of Party G obtaining the regulatory approvals necessary for it to consummate the potential post-signing Party G sale.

On June 2, 2021, the Company submitted its plan of liquidation with respect to the De-Banking to the Utah DFI, the Federal Reserve Bank of San Francisco, the Federal Reserve Bank of Philadelphia and the FDIC.

On June 4, 2021, Mr. Hilzinger communicated to representatives of HPS that Company management and the Company’s advisors were skeptical as to the likelihood that Party G could timely, if ever, obtain the regulatory approvals necessary for it consummate the potential post-signing Party G sale.

Later on June 4, 2021 and on June 7, 2021, representatives of HPS communicated with Mr. Hilzinger to confirm the importance to HPS that the merger be closed in a timely manner, and that HPS would not object if the Company board determined to terminate discussions with Party G regarding the potential post-signing Party G sale.

On June 8, 2021, the Company board held a meeting at which representatives of Mayer Brown, J.P. Morgan and Chain Bridge were present to, among other things, consider the terms of the potential post-signing Party G sale and the findings arising from the reverse due diligence. After discussion and deliberation, the Company board unanimously determined not to pursue the potential post-signing Party G sale. This decision was based on a variety of factors including the considerable uncertainty as to if and when Party G would receive the necessary regulatory approvals to consummate the purchase of MBB which, in the judgment of the Company board after consultation with its advisors, resulted in an unacceptable amount of risk with respect to the ultimate consummation of the proposed merger with HPS. The Company board then instructed Company management and J.P. Morgan to inform Party G that the Company would no longer be pursuing the potential post-signing Party G sale and to terminate further discussions with Party G regarding such matters and, prior to making such outreach to Party G, to relay the Company board’s determination with respect to such matters to HPS.

Later on June 8, 2021, Mr. Hilzinger contacted representatives of HPS to inform them that the Company board had determined that the Company would no longer be pursuing the potential post-signing Party G sale and of the Company board’s reasons for making such determination.

Later on June 8, 2021, representatives of J.P. Morgan informed representatives of Party G on behalf of the Company that the Company would no longer be pursuing the potential post-signing Party G sale and the Company board’s reasons for making such determination.

The Company board recommends that you vote “FOR” the merger proposal.

In reaching its decision to unanimously approve and recommend the adoption of the merger agreement and to recommend that the Company shareholders approve the merger proposal, the Company board consulted with Company management, as well as its legal and financial advisors, and considered numerous factors, including, but not limited to, the following material factors (which factors are not presented in any relative order of importance):

The Company board also considered a variety of other factors in its deliberations concerning the merger agreement and the merger, including, but not limited to, the following material factors (which factors are not presented in any relative order of importance):

In view of, among other things, the variety of factors considered in connection with its evaluation of the merger, the Company board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. The Company board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination.

The Company board based its recommendation on the totality of the information presented to it.

Portions of this explanation of the reasons for the merger and other information presented in this section are forward-looking in nature and, therefore, should be read in light of the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

The Company does not as a matter of course make public projections as to future performance, revenues, earnings or other financial results due to, among other reasons, the inherent uncertainty and unpredictability of the underlying assumptions and estimates. However, the Company is including in this proxy statement a summary of certain unaudited prospective financial information that was provided to the Company board for use in connection with its evaluation of the proposed merger and to the Company financial advisors, who were authorized to rely upon such projections, including for J.P. Morgan’s use in providing financial advice to the Company board. The inclusion of this information should not be regarded as an indication that any of the Company, Parent, Merger Sub, J.P. Morgan, their respective representatives or any other recipient of this information considered, or now considers, it necessarily to be predictive of actual future results (which may be significantly more or less favorable), or that it should be construed as financial guidance, and it should not be relied on as such. None of the Company, Parent, Merger Sub, J.P. Morgan or any other person assumes responsibility if future results are materially different from those discussed in this proxy statement. In addition, analyses relating to the value of the

Company’s business do not purport to be appraisals or reflect the prices at which the Company’s business may actually be sold. Company management directed J.P. Morgan to use the unaudited prospective financial information with respect to the Company that was provided by Company management in connection with the preparation of the financial analyses J.P. Morgan reviewed and discussed with the Company board at its meeting on April 18, 2021 and the preparation of J.P. Morgan’s opinion to the Company board rendered at that meeting.

While presented with numeric specificity, the unaudited prospective financial information reflects numerous estimates and assumptions made with respect to business, economic, market, competition, regulatory and financial conditions and matters specific to the Company’s business, all of which are difficult to predict and many of which are beyond the Company’s control. The unaudited prospective financial information reflects both assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgment, and thus is susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. The Company can give no assurance that the unaudited prospective financial information and the underlying estimates and assumptions will be realized. In addition, since the unaudited prospective financial information covers multiple years, such information by its nature becomes less predictive with each successive year. Furthermore, the unaudited prospective financial information should not be construed as commentary by Company management as to how Company management expects the Company’s actual results to compare to Wall Street research analysts’ estimates, as to which the Company expresses no view.

Actual results may differ materially from those set forth below, and important factors that may affect actual results and cause the unaudited prospective financial information to be inaccurate include, but are not limited to, risks and uncertainties relating to the Company’s business, industry performance, general business and economic conditions, customer requirements, competition and adverse changes in applicable laws, regulations or rules. For other factors that could cause actual results to differ, please see the section entitled “Cautionary Statement Concerning Forward-Looking Statements” in this proxy statement and the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s 2020 Annual Report, its Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and the other reports filed by the Company with the SEC.

The unaudited prospective financial information does not take into account any circumstances or events occurring after the date it was prepared. The Company can give no assurance that, had the unaudited prospective financial information been prepared as of the date of this proxy statement, similar estimates and assumptions would be used. The Company does not intend to, and disclaims any obligation to, make publicly available any update or other revision to the unaudited prospective financial information to reflect circumstances existing since its preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the assumptions underlying the unaudited prospective financial information are shown to be in error, or to reflect changes in general economic or industry conditions. The unaudited prospective financial information does not take into account the possible financial and other effects on the Company of the merger and does not attempt to predict or suggest future results of the surviving corporation. The unaudited prospective financial information does not give effect to the merger, including the impact of negotiating or executing the merger agreement, the expenses that may be incurred in connection with consummating the merger, the potential synergies that may be achieved by the combined company as a result of the merger or the effect of any business or strategic decisions or actions which would likely have been taken if the merger agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the merger. Further, the unaudited prospective financial information does not take into account the effect on the Company of any possible failure of the merger to occur. None of the Company, J.P. Morgan or their respective affiliates, officers, directors, advisors or other representatives has made, makes or is authorized in the future to make any representation to any Company shareholder or other person regarding the Company’s ultimate performance compared to the information contained in the unaudited prospective financial information or that the forecasted results will be achieved. The summary of the unaudited prospective financial information included below is being provided solely because it was made available to the Company board, HPS, Parent, and J.P. Morgan and not to influence your decision as to whether to vote for the merger proposal.

The Company board, HPS, Parent and J.P. Morgan were provided with unaudited prospective financial information with respect to the Company prepared by Company management for the fiscal years 2021 through 2025 (in the case of HPS) and 2031 in the case of the Company board and J.P. Morgan. The following table summarizes selected unaudited prospective financial data for the fiscal years 2021 through 2031.

The unaudited prospective financial information was not prepared with a view toward public disclosure, nor was it prepared with a view toward compliance with accounting principles generally accepted in the United States of America, published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Neither the Company’s independent registered public accounting firm, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the unaudited prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability. The independent registered public accountant reports incorporated by reference into this proxy statement relate to the Company’s historical financial information. They do not extend to the unaudited prospective financial information and should not be read to do so.

In light of the foregoing, and considering that the special meeting will be held after the unaudited prospective financial information was prepared, as well as the uncertainties inherent in any forecasted information, Company shareholders are cautioned not to place unwarranted reliance on such information, and the Company urges all Company shareholders to review the Company’s most recent SEC filings for a description of the Company’s reported financial results. See “Where You Can Find More Information.”

Pursuant to an engagement letter, the Company retained J.P. Morgan as its financial advisor in connection with the proposed merger.

At the meeting of the board of directors of the Company on April 18, 2021, J.P. Morgan rendered its oral opinion, subsequently confirmed in J.P. Morgan’s written opinion dated as of April 18, 2021, to the board of directors of the Company that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the consideration of $23.50 per share in cash (which we refer to as the “Consideration”) to be paid to the holders of the Company common stock in the proposed merger was fair, from a financial point of view, to such shareholders.

The full text of the written opinion of J.P. Morgan dated April 18, 2021, which sets forth, among other things, the assumptions made, matters considered and limits on the review undertaken, is attached as Annex B to this proxy statement and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion. The Company shareholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was addressed to the board of directors of the Company (in its capacity as such) in connection

with and for the purposes of its evaluation of the proposed merger, was directed only to the Consideration to be paid to holders of Company common stock in the merger and did not address any other aspect of the merger. J.P. Morgan expressed no opinion as to the fairness of any consideration to be paid in connection with the propsoed merger to the holders of any other class of securities, creditors or other constituencies of the Company or as to the underlying decision by Company to engage in the proposed merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The opinion does not constitute a recommendation to any shareholder of the Company as to how such stockholder should vote with respect to the proposed merger or any other matter.

In arriving at its opinion, J.P. Morgan, among other things:

In addition, J.P. Morgan held discussions with certain members of the management of the Company with respect to certain aspects of the merger, the past and current business operations of the Company, the financial condition and future prospects and operations of the Company, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.

In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by the Company or otherwise reviewed by or for J.P. Morgan. J.P. Morgan did not independently verify (and did not assume responsibility or liability for independently verifying) any such information or its accuracy or completeness and, pursuant to its engagement letter with the Company, J.P. Morgan did not assume any obligation to undertake any such independent verification. J.P. Morgan did not conduct or was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of the Company or Parent under any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, J.P. Morgan assumed that they were reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management as to the expected future results of operations and financial condition of the Company to which such analyses or forecasts relate. J.P. Morgan expressed no view as to such analyses or forecasts or the assumptions on which they were based. J.P. Morgan’s opinion noted that it understood that in connection with the merger, the Company will effect the De-Banking and that the Consideration will be subject to adjustment as provided in the merger agreement, based on the excess, if any, of Covered Costs related to the De-Banking over the Threshold (in each case of the Covered Costs, De-Banking and Threshold, as defined in the merger agreement). At the Company’s direction, J.P. Morgan assumed that the amount of Covered Costs will result in an adjustment of zero, with no adjustment to the Consideration. J.P. Morgan also assumed that the merger and the other transactions contemplated by the merger agreement will be consummated as described in the merger agreement. J.P. Morgan also assumed that the representations and warranties made by the Company, Parent or Merger Sub in the merger agreement and the related agreements were and will be true and correct in all respects material to its analysis. J.P. Morgan is not a legal, regulatory or tax expert and relied on the assessments made by advisors to the Company with respect to

such issues. J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the merger will be obtained, and that the De-Banking and related transactions will be consummated, in each case without any adverse effect on the Company or on the contemplated benefits of the merger.

The projections furnished to J.P. Morgan were prepared by the Company’s management. The Company does not publicly disclose internal management projections of the type provided to J.P. Morgan in connection with J.P. Morgan’s analysis of the proposed merger, and such projections were not prepared with a view toward public disclosure. These projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of the Company’s management, including, without limitation, factors related to general economic and competitive conditions and prevailing interest rates. Accordingly, actual results could vary significantly from those set forth in such projections. For more information regarding the use of projections and other forward-looking statements, please refer to the section entitled “The Merger – Unaudited Prospective Financial Information” beginning on page 38 of this proxy statement.

J.P. Morgan’s opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of such opinion. J.P. Morgan’s opinion noted that subsequent developments may affect J.P. Morgan’s opinion, and that J.P. Morgan does not have any obligation to update, revise, or reaffirm such opinion. J.P. Morgan’s opinion is limited to the fairness, from a financial point of view, of the Consideration to be paid to holders of the Company common stock in the proposed merger, and J.P. Morgan has expressed no opinion as to the fairness of any consideration paid in connection with the merger to the holders of any other class of securities, creditors or other constituencies of the Company or the underlying decision by the Company to engage in the merger. Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the proposed merger, or any class of such persons relative to the Consideration in the proposed merger or with respect to the fairness of any such compensation.

The terms of the merger agreement, including the Consideration, were determined through arm’s length negotiations between the Company and Parent and Merger Sub, and the Company’s decision to enter into the merger agreement was solely that of the Company’s board of directors. J.P. Morgan’s opinion and financial analyses were only one of the many factors considered by the Company’s board of directors in its evaluation of the proposed merger and should not be viewed as determinative of the views of the Company’s board of directors or management with respect to the proposed merger or the Consideration.

In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methodology in rendering its opinion to the Company’s board of directors on April 18, 2021, and contained in the presentation delivered to the Company’s board of directors on such date in connection with the rendering of such opinion and does not purport to be a complete description of the analyses or data presented by J.P. Morgan. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by J.P. Morgan, the tables must be read together with the full text of each summary. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of J.P. Morgan’s analyses.

Using publicly available information, J.P. Morgan compared selected financial data of the Company with similar data for selected publicly traded companies engaged in businesses which, for purposes of its analysis, J.P. Morgan judged to be sufficiently analogous to the Company. The companies selected by J.P. Morgan were:

These companies were selected by J.P. Morgan because of similarities to the Company in their commercial or specialty finance focus, and, in certain cases, similarities to the Company based on certain operational characteristics and/or certain financial metrics. However, none of the companies selected is identical or directly comparable to the Company, and certain of the companies may have characteristics that are materially different from those of the Company. Accordingly, a complete analysis of the results of the following calculations cannot be limited to a quantitative review of such results and involves complex considerations and judgments concerning the differences in the financial and operating characteristics of the selected companies compared to the Company and other factors that could affect the public trading value of the selected companies and the Company.

In all instances, multiples were based on the closing stock price on April 16, 2021. For each of the following analyses performed by J.P. Morgan, financial and market data and earnings per share estimates for the selected companies were based on the selected companies’ public filings and information J.P. Morgan obtained from SNL Financial and FactSet Research Systems. The multiples and ratios for each of the selected companies were based on the most recent publicly available information as of the date of J.P. Morgan’s fairness opinion.

With respect to the selected companies, the information J.P. Morgan considered included:

J.P. Morgan also performed a public trading analysis based on a regression analysis with respect to the selected companies identified above, to review the relationship between (i) the multiple of price to tangible book value per share, or P/TBVPS and (ii) the 2022E ROATCE based on available estimates obtained from public filings, SNL Financial and FactSet Research Systems (as to the Company only) and the Company’s management projections. Based on this analysis, J.P. Morgan derived a reference range for the implied P/TBVPS multiple of the Company’s common stock of 0.30x to 0.79x.

Based on the above analysis, and such other factors as J.P. Morgan considered appropriate, J.P Morgan then applied a multiple reference range of 8.5x to 14.0x for Price/2021E EPS, 8.0x to 12.5x for Price/2022E EPS and 0.30x to 0.79x for P/TBV to the Company’s management forecasts for the Company’s earnings for the fiscal year 2021 and 2022 and the Company’s tangible book value as of December 31, 2020, respectively. The analysis indicated the following equity values per share of the Company common stock, rounded to the nearest $0.25, which may be compared to the closing price of the Company common stock of $14.24 on April 16, 2021 and the merger consideration of $23.50 per share of the Company’s common stock.

J.P. Morgan calculated a range of implied values for the Company common stock by discounting to present value estimates of the Company’s future dividend stream and terminal value. In performing its analysis, J.P. Morgan utilized, among others, the following assumptions, which were reviewed and approved by the Company’s management:

These calculations resulted in a range of implied values of $21.30 to $25.11 per share of the Company’s common stock, which may be compared to the closing price of the Company common stock of $14.24 on April 16, 2021 and the merger consideration of $23.50 per share of the Company common stock, as illustrated by the following table:

Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and analyses used or made by J.P. Morgan are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses. Moreover, J.P. Morgan’s analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be acquired or sold. None of the selected companies reviewed as described in the above summary are identical to the Company, and none of the selected transactions reviewed was identical to the merger. However, the companies selected were chosen because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analysis, may be considered similar to those of the Company. The transactions selected were similarly chosen because their participants, size and other factors, for purposes of J.P. Morgan’s analysis, may be considered similar to the merger. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies compared to the Company and the transactions compared to the merger.

As a part of its investment banking business, J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for corporate and other purposes. J.P. Morgan was selected to advise the Company with respect to the merger on the basis of, among other things, such experience and its qualifications and reputation in connection with such matters and its familiarity with the Company and the industries in which it operates.

For services rendered in connection with the proposed merger, the Company has agreed to pay J.P. Morgan an estimated fee of approximately $8.66 million, $2 million of which became payable upon the delivery of J.P. Morgan’s opinion and the remainder of which will become payable upon consummation of the merger. In addition, the Company has agreed to reimburse J.P. Morgan for its expenses incurred in connection with its services, including the fees and disbursements of counsel, and will indemnify J.P. Morgan against certain liabilities arising out of J.P. Morgan’s engagement.

During the two years preceding the date of J.P. Morgan’s opinion, J.P. Morgan and its affiliates have not had any other material financial advisory or other material commercial or investment banking relationships with the Company, its significant shareholder Red Mountain, Parent or Parent’s affiliate HPS. During the two years preceding the date of J.P. Morgan’s opinion, J.P. Morgan and its affiliates have had and continue to have commercial or investment banking relationships with certain of HPS’s affiliates, for which J.P. Morgan and such affiliates have received or will receive customary compensation. Such services during such period have included acting as joint lead bookrunner on offerings of equity securities of certain affiliates of HPS in February 2021 and March 2021. J.P. Morgan and its affiliates hold, on a proprietary basis, less than 1% of the outstanding common stock (or comparable equity securities) of each of the Company, its significant shareholder Red Mountain, Parent, HPS and certain of its affiliates. During the two-year period preceding delivery of its opinion, the aggregate fees recognized by J.P. Morgan from the Company were less than $50,000, from Red Mountain Capital Partners, LLC were less than $50,000, from Parent were $0, and from HPS and certain of its affiliates were approximately $3.6 million. In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of the Company and certain of Parent and HPS’s affiliates for their own accounts or for the accounts of customers and, accordingly, they may at any time hold long or short positions in such securities or other financial instruments.

The obligations of Parent and Merger Sub to complete the merger are not contingent upon the receipt of any financing.

European Asset Value Offshore Fund II, L.P., European Asset Value Offshore Fund (USD) II, L.P., European Asset Valued Fund (USD) II, L.P. and European Asset Value Irish Fund II, funds managed by HPS (which we refer to collectively as the “Guarantors”), Parent and Merger Sub have entered into an equity commitment letter,

dated as of April 18, 2021 (which we refer to as the “equity commitment letter”), pursuant to which the Guarantors (severally and not jointly) committed to purchase securities of Parent for $250 million in cash substantially contemporaneously with the consummation of the merger, subject to the terms and conditions of the equity commitment letter.

The Guarantors’ obligation to make the investment pursuant to the equity commitment letter is subject to (a) the valid execution and delivery of the merger agreement by all parties to the merger agreement and the merger agreement not having been terminated, (b) the satisfaction, or waiver by Parent, of each of the conditions to Parent’s obligations to consummate the transactions contemplated by the merger agreement set forth in the merger agreement, (c) the substantially contemporaneous receipt of the proceeds of the debt financing, and (d) the substantially contemporaneous consummation of the merger in accordance with the terms of the merger agreement.

The equity commitment letter will terminate upon, among other events, the closing of the merger, valid termination of the merger agreement, or the Company’s bringing certain legal proceedings against Guarantors or certain of their affiliates and representatives other than (a) claims by the Company against Parent and Merger Sub under the merger agreement, (b) an exercise by the Company of its rights as a third party beneficiary under the equity commitment letter to specifically enforce Parent’s right to cause the Guarantors to fund their equity commitment under the equity commitment letter, (c) claims by the Company against the Guarantors under the limited guarantee and (d) claims by the Company against HPS Investment Partners, LLC under its confidentiality agreement with the Company (which we refer to as, collectively, the “retained claims”).

The equity commitment letter provides, among other things, that if the Company becomes entitled to specific performance under the merger agreement to cause Parent to obtain the equity financing, then the Company is an express third party beneficiary of Parent’s rights under the equity commitment letter solely for the purpose of causing the investment to be made pursuant to its terms. In addition, the merger agreement provides that Parent and Merger Sub will maintain in effect the equity commitment letter in accordance with its terms and subject to its conditions, or on such other terms as are permitted by the merger agreement or agreed to in writing by the Company.

Parent also plans to finance a portion of the amounts required to complete the merger through a debt financing in the amount of $700 million (which we refer to as the “debt financing”). Subject to customary terms, the Company has agreed to, and to cause its subsidiaries to, to use commercially reasonable efforts to provide Parent with customary cooperation as reasonably requested by Parent or Merger Sub to assist them in arranging such debt financing.

In the merger agreement, Parent and Merger Sub have represented that the equity financing and debt financing, together with cash on hand, will provide Parent with funds sufficient to satisfy, or cause to be satisfied, the payment of, among other things, the aggregate merger consideration and the other payments contemplated by the merger agreement.

To induce the Company to enter into the merger agreement, the Guarantors executed the limited guarantee, dated as of April 18, 2021, in favor of the Company (which we refer to as the “limited guarantee”). Pursuant to the limited guarantee, the Guarantors (severally and not jointly) have guaranteed the due and punctual payment, if due, of the termination fee payable by Parent under the merger agreement and certain other payments as set forth in the limited guarantee, subject to the terms and conditions of the limited guarantee and a maximum liability equal to $21,655,372.

The limited guarantee terminates upon the earliest to occur of (a) the effective time, (b) the date on which the Company bringing legal proceedings against Guarantors or certain of their affiliates and representatives other than retained claims, (c) receipt by the Company of payment in full of the obligations guaranteed under the limited guarantee and (d) the three-month anniversary of the valid termination of the merger agreement in accordance with its terms unless the Company has made a claim under the limited guaranty prior to such date, in which case the limited guarantee will not terminate until such claim is finally settled or otherwise resolved either in a final judicial determination or by agreement of the Company and the Guarantors (or their permitted assignees) and the obligations under the limited guarantee finally determined or agreed to be owed by the Guarantors are satisfied in full.

In considering the recommendation of the Company board with respect to the merger, you should be aware that the Company’s directors and executive officers have certain interests in the merger that may be different from, or in addition to, the interests of the other Company shareholders. The Company board was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in determining to recommend to Company shareholders that they vote for the merger proposal and thereby approve the transactions contemplated by the merger agreement, including the merger. These interests are described below.

The amounts described below are estimates based on multiple assumptions that may or may not actually occur, including assumptions described in this proxy statement, and do not reflect certain compensation actions that may occur before the consummation of the merger. As a result, the actual amounts, if any, to be received by the executive officers and non-employee directors may materially differ from the amounts set forth below. All dollar amounts have been rounded to the nearest whole dollar.

The Company restricted shares, Company RSUs, Company PSUs, and Company options (which we collectively refer to as the “Company equity awards”) held by the Company’s employees, including the Company’s executive officers, and by directors of the Company immediately prior to the effective time will be cancelled in exchange for a cash payment in the same manner as those Company equity awards held by other employees of the Company. As described further in the section titled “The Merger Agreement—Treatment of Company Equity Awards,” such awards will be subject to the following treatment:

All stock options held by the Company’s named executive officers, other executive officers and directors that are vested or are scheduled to be vested or accelerated in connection with the merger as of the date of this proxy

statement have an exercise price greater than $23.50 per share and, therefore, no named executive officers, other executive officers or directors will receive compensation for their stock options in connection with the merger. Further information regarding the named executive officers may be found in “—Golden Parachute Compensation” beginning on page 49.

The table below sets forth certain information (without subtraction of applicable withholding taxes) of the Company restricted shares, Company RSUs and Company PSUs held by the Company’s executive officers and directors for which vesting will be accelerated in connection with the merger, assuming a merger closing date of July 1, 2021.

As of the date of this proxy statement, none of the Company’s executive officers has entered into any agreement with Parent or any of Parent’s affiliates regarding employment with, or the right to purchase the equity of, the surviving corporation or one or more of its affiliates. However, it is possible that Parent may enter into employment, consulting or retention arrangements with certain executive officers upon the consummation of the merger.

In addition, the merger agreement provides that following the effective time and until the first anniversary of the merger (which we refer to as the “continuation period”), Parent shall provide, or shall cause the surviving corporation to provide, the individuals who are employed by the Company or any of its subsidiaries immediately before the effective time and who continue employment during such time period with (i) annual base compensation no less than the annual base compensation provided to such Company employees immediately prior to the effective time, (ii) annual target cash incentive amounts that are no less than the annual target cash incentive amounts provided to such Company employees immediately prior to the effective time, (iii) severance benefits that are no less favorable than the severance benefits provided to such Company employees immediately prior to the effective time and (iv) other employee benefits that are substantially comparable in the aggregate to the employee benefits provided to such Company employees immediately prior to the effective time. For more information, see “The Merger Agreement—Employee Matters” on page 72.

Subject to the terms and conditions of the Company’s Severance Pay Plan for Senior Executives, if an eligible executive’s employment is terminated either (a) (i) by the Company for any reason other than on account of cause (as defined in the plan) or the executive’s death or disability, or (ii) with respect to only an eligible executive who is designated as Tier I participant or Tier II participant, by such eligible executive on account of a good reason (as defined in the plan); (b) the eligible executive’s employment termination date does not occur at any time between the date a change of control occurs and the second anniversary of the change of control of the Company; (c) the eligible executive has executed the participation agreement required under the plan; and (d) the eligible executive signs and does not revoke the release required under the plan within the time period required for such release, then the eligible executive will be entitled to the following severance benefits:

If an eligible executive’s employment is terminated under the foregoing circumstances within two years following a change of control, the eligible executive shall be entitled to salary continuation as described above with a change of control multiplier of 2.0 for a Tier I executive, 1.5 for a Tier II executive and 0.75 for a Tier III executive, as well as the executive’s target cash incentive payment for the year of termination and health benefits continuation for a period of 18 months for a Tier I or Tier II executive and 9 months for a Tier III executive.

This section sets forth information required by Item 402(t) of Regulation S-K regarding the compensation for each named executive officer of the Company that is based on or otherwise relates to the merger. This compensation is referred to as “golden parachute” compensation by the applicable SEC disclosure rules, and in this section we use such term to describe the merger-related compensation payable to our named executive officers. The merger-related compensation payable to these individuals is the subject of a non-binding, advisory vote of the Company shareholders, as described below in the section “Proposal 2—Advisory Vote on Merger-Related Compensation for the Company’s Named Executive Officers.”

The estimated value of the payments and benefits that the Company’s named executive officers will receive in connection with the merger is quantified below in accordance with Item 402(t) of Regulation S-K. The estimated values are based on (i) an assumption that the consummation of the merger occurs on July 1, 2021 (the latest practicable date determined in accordance with Item 402(t) of Regulation S-K); (ii) the merger consideration; (iii) salary levels as of the date of this proxy statement; (iv) the number of unvested Company equity awards held by the named executive officers as of the date of this proxy statement, assuming a merger closing date of July 1, 2021; and (v) termination of each named executive officer’s employment by the Company without “cause” or by the named executive officer for “good reason” (as defined the Company’s severance pay plan for senior executives) immediately after the consummation of the merger.

Depending on when the merger occurs, certain Company equity awards that would be unvested as of July 1, 2021 and included in the table below may vest independently of the merger pursuant to their terms based on continued service with the Company. In addition, the amounts indicated below are estimates based on multiple assumptions that may or may not actually occur, including assumptions described in this proxy statement, and do

not reflect any compensation actions that may occur before the consummation of the merger. As a result, the actual amounts, if any, to be received by a named executive officer may materially differ from the amounts set forth below. All dollar amounts have been rounded to the nearest whole dollar.

The table below quantifies the estimated value of the accelerated vesting of the Company equity awards held by each named executive officer based on an assumed merger closing date of July 1, 2021 and the value of the cash severance that would be payable to each named executive officer assuming each individual's employment is terminated by the Company without cause or by the individual for good reason immediately following the consummation of the merger and on the assumed merger closing date of July 1, 2021.

The merger agreement provides that Parent will cause the surviving corporation to indemnify and hold harmless each present and former director and officer of the Company and its subsidiaries to the fullest extent permitted by applicable law from and against any costs or expenses incurred in connection with any suit, action, claim, arbitration, mediation or legal, arbitral, administrative or other proceeding arising out of or pertaining to matters existing or occurring at or prior to the effective time relating to such person’s service with, at the request of or for the benefit of the Company or its subsidiaries, including the transactions contemplated by the merger agreement, and will cause the surviving corporation to also advance expenses to such persons to the fullest extent permitted by applicable law, provided that such person provides an undertaking to repay such advances if it is ultimately determined that such person is not entitled to indemnification.

The merger agreement also provides that, from and after the effective time, Parent will cause the surviving corporation to honor the provisions, to the extent they are enforceable under applicable law, regarding exculpation of directors, limitation of liability of directors and officers and advancement of expenses contained in the Company’s articles of incorporation, bylaws, the comparable organizational documents of any of the Company’s subsidiaries or any indemnification contract between the applicable indemnified party and the Company or any of its subsidiaries immediately prior to the effective time.

Subject to certain limitations, the merger agreement also requires Parent to cause the surviving corporation to maintain, for a period of six years following the effective time, directors’ and officers’ liability insurance and fiduciary liability insurance policies from an insurer with the same or better credit rating as the Company’s current insurance carrier with benefits, levels of coverage and terms and conditions that are at least as favorable as the Company’s policies existing immediately prior to the effective time with respect to matters existing or

occurring at or prior to the effective time, including acts or omissions in connection with the merger agreement and the consummation of the transactions contemplated by the merger agreement. The surviving corporation will not, however, be required to spend annually an amount greater than 300% of the annual premium paid by the Company as of the date of the merger agreement (which we refer to as the “maximum annual premium”). The Company may in its sole discretion obtain but following consultation with Parent, prior to the effective time, a six-year prepaid “tail” policy at an aggregate cost no greater than the maximum annual premium, providing coverage not less favorable than the Company’s policies existing immediately prior to the effective time. For additional information, see the section of this proxy statement entitled “The Merger Agreement—Indemnification; Directors’ and Officers’ Insurance.”

The following discussion is a summary of the material U.S. federal income tax consequences of the merger to U.S. holders and Non-U.S. holders (each as defined below) whose shares of Company common stock are converted into the right to receive cash in the merger. This summary does not purport to consider all aspects of U.S. federal income taxation that might be relevant to the Company shareholders. This discussion does not address the consequences of the merger to Company shareholders who receive cash pursuant to the exercise of dissenters’ rights. This discussion applies to a Company shareholder only if the shareholder holds shares of Company common stock as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment) for U.S. federal income tax purposes, and does not apply to Company shareholders that are members of a special class of persons subject to special rules, including but not limited to:

This discussion is based on the Internal Revenue Code of 1986, as amended (which we refer to as the “Code”), its legislative history, final, temporary and proposed U.S. Treasury Regulations, published rulings and administrative guidance from the Internal Revenue Service (which we refer to as the “IRS”) and court decisions, all as in effect as of the date of this proxy statement. These laws and other authorities are subject to change, possibly on a retroactive basis. Any such change could affect the accuracy of the statements and conclusions set forth in this proxy statement. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the merger.

This discussion addresses only U.S. federal income taxation and does not address any aspect of foreign, state, local, alternative minimum, estate, gift or other tax law that may be applicable to a Company shareholder. This discussion does not address all U.S. federal income tax consequences relevant to a Company shareholder’s particular circumstances, including the impact of taxes under the Foreign Account Tax Compliance Act.

This discussion is intended to provide only a general summary of the material U.S. federal income tax consequences of the merger to U.S. holders of shares of Company common stock. The Company does not intend for this discussion to be a complete analysis or description of all potential U.S. federal income tax consequences of the merger. The U.S. federal income tax laws are complex and subject to varying interpretations. Accordingly, the IRS may not agree with the tax consequences described in this proxy statement.

If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of Company common stock, the tax treatment of a partner in such partnership generally will depend on the status of the partner and the activities of the partner and the partnership. A partner of a partnership

holding shares of Company common stock should consult the partner’s tax advisor regarding the U.S. federal income tax consequences of the merger to the partner.

Each Company shareholder is urged to consult with the Company shareholder’s own tax advisor as to the tax consequences of the merger in the Company shareholder’s particular circumstances, including the applicability and effect of U.S. federal (including the alternative minimum tax), state, local and foreign tax laws and of changes in those laws.

For purposes of this discussion, we use the term “U.S. holder” to mean a beneficial owner of shares of Company common stock that is, for U.S. federal income tax purposes:

The exchange of shares of Company common stock for cash in the merger will generally be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder whose shares of Company common stock are converted into the right to receive cash in the merger will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, between (i) the amount of cash received with respect to such shares, determined before the deduction of any applicable withholding taxes, as described below under “—Backup Withholding and Information Reporting” and (ii) the U.S. holder’s adjusted tax basis in such shares. A U.S. holder’s adjusted tax basis generally equals the price the U.S. holder paid for its shares of Company common stock less any distributions received that were in excess of the Company’s current and accumulated earnings and profits (but not reduced below zero). Gain or loss will be determined separately for each block of shares of Company common stock (i.e., shares acquired at the same cost in a single transaction). Such capital gain or loss will be long-term capital gain or loss, provided that the U.S. holder’s holding period for each such block of shares of Company common stock exceeds one year at the effective time, and otherwise will be short-term capital gain or loss. Long-term capital gains of non-corporate U.S. holders are generally eligible for reduced rates of U.S. federal income taxation. There are limitations on the deductibility of capital losses.

For purposes of this discussion, the term “Non-U.S. holder” means a beneficial owner of shares of Company common stock that is neither a U.S. holder nor an entity that is treated as a partnership for U.S. federal income tax purposes.

Subject to the discussion below in “—Backup Withholding and Information Reporting,” any gain realized by a Non-U.S. holder resulting from the merger generally will not be subject to U.S. federal income or withholding tax unless:

Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular graduated rates applicable to U.S. persons. A Non-U.S. holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.

Gain described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by certain U.S. source

capital losses of the Non-U.S. holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses.

Non-U.S. holders are urged to consult their own tax advisors regarding potentially applicable income tax treaties that may provide for different rules.

U.S. holders that are individuals, estates or trusts that do not fall into a special class of trusts that is exempt from such tax are generally subject to a 3.8% tax on the lesser of (1) the U.S. holder’s “net investment income” (or “undistributed net investment income” in the case of an estate or trust) for the relevant taxable year and (2) the excess of the U.S. holder’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000, depending on the individual’s circumstances). A U.S. holder’s net investment income generally includes capital gain recognized on the exchange of shares of Company common stock for cash in the merger, unless such capital gain is derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). There are limitations on deducting capital losses in calculating a U.S. holder’s net investment income. U.S. holders are urged to consult their own tax advisors regarding the applicability of the Medicare tax to gain recognized on the exchange of shares of Company common stock for cash in the merger.

Under certain circumstances, a U.S. holder or Non-U.S. holder may be subject to information reporting and backup withholding (currently at a rate of 24%) with respect to the merger consideration. Backup withholding generally will not apply to: (i) a U.S. holder who properly establishes an exemption or provides the U.S. holder’s correct taxpayer identification number and otherwise complies with the applicable requirements of the backup withholding rules, or (ii) a Non-U.S. holder who provides a certification of such holder’s non-U.S. status on the applicable IRS Form W-8 or otherwise establishes a basis for exemption from backup withholding.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules can be refunded or credited against a U.S. holder’s or Non-U.S. holder’s U.S. federal income tax liability, if any, provided that such holder furnishes the required information to the IRS in a timely manner.

The U.S. federal income tax consequences described above are not intended to constitute a complete description of all tax consequences relating to the merger. Because individual circumstances may differ, each Company shareholder should consult the Company shareholder’s own tax advisor regarding the applicability of the rules discussed above to the Company shareholder and the particular tax effects to the Company shareholder of the merger in light of the Company shareholder’s particular circumstances and the application of state, local and foreign tax laws.

Subject to the terms and conditions of the merger agreement, the parties have agreed to cooperate and use their reasonable best efforts to promptly prepare and file all necessary documentation and to obtain as promptly as practicable all consents, registrations, approvals, permits and authorizations necessary or advisable to consummate the merger or any of the other transactions contemplated by the merger agreement. These approvals include clearance under the HSR Act, as described further below. Although we expect that all required regulatory clearances and approvals will be obtained, we cannot assure you that these regulatory clearances and approvals will be timely obtained, obtained at all or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions on the completion of the merger, including the requirement to divest assets, or require changes to the terms of the merger agreement.

The consummation of the merger is subject to the expiration or early termination of the waiting period applicable to the consummation of the merger under the HSR Act. Under the HSR Act, and the rules promulgated thereunder, the merger cannot be consummated until the parties to the merger agreement have given notification and furnished information to the Federal Trade Commission and the Department of Justice and until the applicable 30-day waiting period has expired or has been terminated. On June 16, 2021, the Company and HPS

each filed a premerger notification and report form under the HSR Act, and the waiting period is scheduled to expire on July 16, 2021. The parties requested early termination of the 30-day waiting period under the HSR Act.

The consummation of the merger is conditioned on the Company effectively ceasing operations as a bank prior to the effective time and consummating a “De-Banking”, which under the terms of the merger agreement requires that the Company effect a transaction or a series of transactions which results in (i) (A) the Company having divested its entire ownership interest in MBB or (B) (1) the Company having submitted a letter to the Commissioner of the Utah Department of Financial Institutions (which we refer to as the “Utah DFI”) surrendering the license and authority to conduct the business of banking held by MBB, (2) the Federal Deposit Insurance Corporation (which we refer to as the “FDIC”) having issued an order terminating MBB’s deposit insurance from the FDIC and (3) MBB having no remaining deposits and (ii) if the merger were consummated, none of Parent, Merger Sub, or their respective affiliates, directors, officers, principals or limited partners being subject to any burdensome condition or burdensome requirement imposed by any banking regulator or banking law.

In order for the Company to execute the De-Banking, the Company must file a plan of liquidation with the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of San Francisco, the Utah DFI and the FDIC, each of which must approve such plan of liquidation before the De-Banking may be consummated. Under the terms of the merger agreement, the Company must file the plan of liquidation and all any other related and required applications with all such regulators no later than June 2, 2021. The Company made the applicable filings on June 2, 2021. On June 25, 2021, the Company received the requisite non-objections to the Company’s plan of liquidation and has begun implementing the plan.

Subject to the terms and conditions set forth in the merger agreement, the parties are required to use reasonable best efforts to take or cause to be taken all reasonable actions, and do or cause to be done all things, reasonably necessary or advisable to effect the De-Banking as soon as reasonably practicable after the date of the merger agreement, and Parent and Merger Sub are required to use reasonable best efforts to provide all cooperation reasonably requested by the Company in connection with the De-Banking, except that nothing under the merger agreement requires that Parent or Merger Sub to take any action that would require them or any of their respective affiliates, certain representatives or limited partners to become party to any application, notice or filing with respect to the De-Banking or become subject to any burdensome condition or burdensome requirement imposed by any banking regulator or banking law.

As of the date of this proxy statement, three complaints have been filed by purported holders of Company common stock. On June 18, 2021, a purported holder of Company common stock filed a complaint against the Company and the members of the Company board in the United States District Court for the Southern District of New York captioned Stein v. Marlin Business Services Corp. et al, No. 1:21-cv-05384 (which we refer to as the “Stein Complaint”). On June 28, 2021, a purported holder of Company common stock filed a complaint against the Company and the members of the Company board in the United States District Court for the Eastern District of New York captioned Gibson v. Marlin Business Services Corp. et al, No. 1:21-cv-03626 (which we refer to as the “Gibson Complaint”). On June 28, 2021, a purported holder of Company common stock filed a complaint against the Company and the members of the Company board in the United States District Court for the Southern District of New York captioned Ciccotelli v. Marlin Business Services Corp. et al, No. 1:21-cv-05608 (which we refer to as the “Ciccotelli Complaint,” and collectively with the Stein Complaint and the Gibson Complaint, the “Complaints”).

The Complaints assert, among other things, claims under Section 14(a) and Section 20(a) of the Exchange Act, and Rule 14a-9 promulgated thereunder, for allegedly causing a materially incomplete and misleading preliminary proxy statement to be filed with the SEC and disseminated to the Company’s shareholders. Among other remedies, the Complaints seek to enjoin the defendants from proceeding with, consummating or closing the merger unless and until the allegedly materially incomplete and misleading information is disclosed to Company shareholders.

The Company believes that the Complaints are without merit. If these cases are not resolved, the lawsuit(s) could prevent or delay completion of the merger and result in costs to the Company. There can be no assurances that additional complaints or demands will not be filed or made with respect to the merger. If additional similar complaints or demands are filed or made, absent new or different allegations that are material, the Company will not necessarily publicly disclose them.

The following discussion contains certain information about the merger. The discussion is subject to, and qualified in its entirety by reference to, the merger agreement attached as Annex A to this proxy statement and incorporated herein by reference. We urge you to read carefully this entire proxy statement, including the merger agreement attached as Annex A, for a more complete understanding of the merger.

The merger agreement and this summary of terms are included to provide you with information regarding the terms of the merger agreement. Factual disclosures about the Company contained in this proxy statement or in the public reports of the Company filed with the SEC may supplement, update or modify the factual disclosures about the Company contained in the merger agreement. The merger agreement contains representations and warranties by Parent and Merger Sub, on the one hand, and the Company, on the other hand. The representations, warranties and covenants made in the merger agreement by the Company, Parent and Merger Sub were qualified and subject to important limitations that were negotiated and agreed to by the Company, on the one hand, and Parent and Merger Sub, on the other hand. In particular, in your review of the representations and warranties contained in the merger agreement, and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purposes of allocating risk between the parties to the merger agreement, rather than establishing matters as facts. The representations and warranties also may be subject to a contractual standard of materiality different from that generally relevant to investors or applicable to reports and documents filed with the SEC, and some were qualified by certain confidential disclosures made by the Company, Parent and Merger Sub in connection with the merger agreement and certain public filings made by the Company with the SEC. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement, may have changed since the date of the merger agreement.

For the foregoing reasons, the representations and warranties, or any descriptions of those provisions, should not be read alone or relied upon as characterizations of the actual state of facts or condition of the Company, Parent, Merger Sub or any of their respective subsidiaries or affiliates. Instead, such provisions or descriptions should be read only in conjunction with the other information provided elsewhere in, or incorporated by reference into, this proxy statement. See “Where You Can Find More Information.” The Company will provide additional disclosures in its public reports to the extent it is aware of the existence of any material facts that are required to be disclosed under federal securities laws and that might otherwise contradict the terms and information contained in the merger agreement and will update such disclosure as required by federal securities laws.

The merger agreement provides for the merger of Merger Sub with and into the Company upon the terms, and subject to the conditions, set forth in the merger agreement and in accordance with the Pennsylvania Business Corporation Law of 1988 (which we refer to as the “PBCL”). At the effective time, the separate corporate existence of Merger Sub will cease. As the surviving corporation, the Company will continue to exist following the merger. As a result of the merger, the surviving corporation will be a wholly owned subsidiary of Parent.

The directors of Merger Sub immediately prior to the effective time will, from and after the effective time, be the directors of the surviving corporation, until their respective successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the surviving corporation’s articles of incorporation and bylaws. The officers of Merger Sub immediately prior to the effective time will, from and after the effective time, be the officers of the surviving corporation, until their respective successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the surviving corporation’s articles of incorporation and bylaws.

The merger agreement provides that the closing for the merger (the “closing”) will take place as soon as practicable (but in any event within five business days) following the first day on which all of the conditions to the closing (described in “—Conditions to the Merger” beginning on page 77 of this proxy statement) have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing, but subject

to the satisfaction or waiver of those conditions at the closing), or at such other time as the Company and Parent may agree in writing. The merger agreement provides that the closing will not occur prior to the date that is eight months from the date of the merger agreement, which would be December 18, 2021 (unless waived by Parent).

The effective time will occur when the statement of merger has been duly filed with the Secretary of State of the Commonwealth of Pennsylvania (or at such later time as the Company and Parent may agree in writing and specify in the statement of merger).

In the merger, each share of Company common stock issued and outstanding immediately prior to the effective time (except for excluded shares) will be converted into the right to receive the merger consideration of $23.50 in cash without interest, subject to adjustment as described below. Excluded shares include (i) shares that are owned by Parent, Merger Sub or any other wholly owned subsidiary of Parent or owned by the Company or any wholly owned subsidiary of the Company and (ii) shares that are held by any record holder who has not voted in favor of the adoption of the merger agreement or consented thereto in writing and who has properly exercised dissenters’ rights with respect to such shares in accordance with Subchapter 15D of the PBCL).

The merger consideration is subject to potential downward adjustment equal to (a) the amount, if any, by which “Covered Costs” exceed $8.0 million divided by (b) the number of “Fully Diluted Shares.” For purposes of the merger agreement, “Covered Costs” means (i) the fees and expenses of legal and other third party advisors and (ii) any costs and expenses associated with the payoff or settlement of a deposit of Marlin Business Bank (which we refer to as “MBB”) to the extent in excess of the par value of such deposit or solely attributable to accrued interest with respect to such deposit, in each case, incurred by the Company after the date of the merger agreement solely in connection with the De-Banking. “Fully Diluted Shares” means all issued and outstanding shares of Company common stock, together with all such shares that the Company would be required to issue assuming the conversion or exchange of any then-outstanding warrants, options, benefit plans or obligations, securities or instruments convertible or exchangeable into, or rights exercisable for, such securities, but only to the extent so exercisable, convertible or exchangeable prior to consummation of the merger or exercisable, convertible or exchangeable as a result of the consummation of the merger.

At the effective time, cancelled shares will automatically cease to be outstanding, will be cancelled and will cease to exist. For information on the treatment of dissenting shares in the merger, see the section below entitled “—Dissenters’ Rights” beginning on page 59 of this proxy statement and the section entitled “Dissenters’ Rights” beginning on page 86 of this proxy statement.

At the effective time, with respect to each outstanding share that is subject to any vesting, forfeiture, repurchase or other lapse restriction under the Company stock plans (each a “Company restricted share”) and outstanding immediately prior to the effective time, such vesting, forfeiture, repurchase or other lapse restriction will lapse and such restricted share will be fully vested and will be converted into the right to receive the merger consideration.

At the effective time, each outstanding restricted stock unit in respect of shares granted under the Company stock plans that is outstanding immediately prior to the effective time (each, a “Company RSU”) will fully vest and will be cancelled and converted into the right to receive an amount in cash, without interest, equal to the merger consideration in respect of each share of Company common stock underlying such Company RSU. The cash amount will be paid as soon as reasonably practicable (but no later than the next regularly scheduled payroll date) after the effective time, unless later payment is required by Section 409A of the Code.

At the effective time, each restricted stock unit in respect of shares granted under the Company stock plans that is outstanding immediately prior to the effective time and that vests, in whole or in part, based on the achievement of a specified level of performance (which we refer to as a “Company PSU”) (i) will, if it was

awarded during December 2020, vest and be deemed satisfied based on actual performance determined as of the effective time in accordance with the terms of the Company PSU, and (ii) will, if it was awarded other than during December 2020, fully vest and be deemed satisfied at the target level of one hundred percent (100%). Each Company PSU will be cancelled and converted into the right to receive an amount in cash, without interest, equal to the merger consideration in respect of each share of Company common stock underlying such Company PSU. The cash amount will be paid as soon as reasonably practicable (but no later than the next regularly scheduled payroll date) after the effective time, unless later payment is required by Section 409A of the Code.

At the effective time, each stock option granted under the Company stock plans that is outstanding immediately prior to the effective time (each, a “Company option”), whether vested or unvested, that has an exercise price per share that is less than the merger consideration will fully vest and will be cancelled and converted into the right to receive an amount in cash, without interest, equal to the product of (i) the amount by which the merger consideration exceeds the exercise price per share of such stock option and (ii) the total number of shares of Company common stock subject to such stock option. The cash amount will be paid as soon as reasonably practicable (but no later than three business days) after the effective time, unless later payment is required by Section 409A of the Code. At the effective time, each Company option that has an exercise price per share that is greater than or equal to the merger consideration will be cancelled for no consideration or payment, and will cease to exist, and the holder of such Company option shall not be entitled to payment of any consideration therefor.

Prior to the effective time, Parent will select and enter into an agreement with a paying agent. Under the agreement with the paying agent, the paying agent will act as agent for the Company shareholders in connection with the merger and receive payment of the aggregate merger consideration to which the Company shareholders are entitled pursuant to the merger agreement. At or prior to the effective time, Parent will deposit or cause to be deposited with the paying agent cash in immediately available funds in an amount sufficient to fund the aggregate merger consideration payable to the Company shareholders pursuant to the merger agreement.

Promptly after the effective time, and in any event within two business days thereafter, Parent will cause the paying agent to mail or otherwise provide to each holder of record of shares of Company common stock (other than holders of excluded shares) the following:

Upon surrender of a certificate representing shares of Company common stock (or affidavits of loss in lieu thereof) or book-entry shares to the paying agent together with the properly completed and validly executed transmittal materials and any other documents reasonably required by the transmittal material instructions or by the paying agent (collectively, the “required transmittal materials”), the holder of a certificate representing shares of Company common stock (or affidavits of loss in lieu thereof) or book-entry shares will be entitled to receive, and Parent will cause the paying agent to pay and deliver promptly after the effective time, a cash amount equal to the product of the number of shares of Company common stock represented by the holder’s certificates and book-entry shares multiplied by the merger consideration. No interest will be paid or accrued on any amount payable upon due surrender of a certificate representing shares of Company common stock (or affidavits of loss in lieu thereof) or book-entry shares.

Until surrendered in the manner contemplated above, each share of Company common stock will be deemed to represent at any time after the effective time only the right to receive upon such surrender (together with the transmittal materials, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be reasonably required pursuant to the transmittal material instructions or by the paying agent) the merger consideration pursuant to the merger agreement.

Any merger consideration deposited with the paying agent (including the proceeds of any investment thereof) that remains undistributed six months after the effective time will be delivered to Parent or the surviving

corporation upon demand by Parent. Thereafter, any former holders of shares of Company common stock (other than excluded shares) will be entitled to look only to Parent and the surviving corporation for payment of the merger consideration upon surrender of their certificates representing shares of Company common stock (or affidavits of loss in lieu thereof) or book-entry shares in accordance with the procedures for surrender set forth above, and Parent and the surviving corporation will remain liable (subject to applicable abandoned property, escheat or other similar law) for payment of claims for the merger consideration payable upon due surrender of such certificates representing shares of Company common stock (or affidavits of loss in lieu thereof) or book-entry shares.

From and after the effective time, the stock transfer books of the Company will be closed and there will be no transfers on the stock transfer books of the Company of the shares of Company common stock that were outstanding immediately prior to the effective time.

If any certificate representing shares of Company common stock has been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate representing shares of Company common stock to be lost, stolen or destroyed and, if required by the paying agent, the surviving corporation or Parent, the posting by such person of a bond in a reasonable amount as the paying agent or Parent may direct as indemnity against any claim that may be made against it with respect to such certificate representing shares of Company common stock, the paying agent will pay and deliver promptly after the effective time in exchange for such certificate representing shares of Company common stock a cash amount equal to the product of the number of shares of Company common stock represented by the lost, stolen or destroyed certificate representing shares of Company common stock multiplied by the merger consideration, without interest.

The paying agent, Parent and the surviving corporation will be entitled to deduct and withhold any applicable taxes from the consideration otherwise payable pursuant to the merger agreement to any holder of shares of Company common stock, Company restricted stock, Company RSUs, Company PSUs or Company stock options, and pay over such withheld amount to the appropriate governmental entity. Any amount so withheld will be promptly remitted to the applicable governmental entity and be treated for all purposes under the merger agreement as having been paid to the person in respect of whom such deduction and withholding was made.

Shares that are held by any record holder who has not voted in favor of the adoption of the merger agreement or consented thereto in writing and who has properly exercised dissenters’ rights with respect to such shares in accordance with Subchapter 15D of the PBCL (which we refer to as the “Dissenting Shares”) shall not be converted into the right to receive the merger consideration payable pursuant to the merger agreement, but instead at the effective time shall become entitled to only such rights as are granted by Subchapter 15D of the PBCL and, at the effective time, all such Dissenting Shares shall cease to be outstanding and shall automatically be canceled and cease to exist, and the holder of such Dissenting Shares shall cease to have any rights with respect thereto, except as set forth in the merger agreement and the PBCL.

Notwithstanding the immediately preceding sentence, if any such holder fails to perfect or otherwise waives, withdraws or loses the rights granted under Subchapter 15D of the PBCL or a court of competent jurisdiction determines that such holder is not entitled to the relief provided by Subchapter 15D of the PBCL, then the such holder’s rights under Subchapter 15D of the PBCL shall be forfeited and cease, and each of such holder’s Dissenting Shares shall be deemed to have been converted at the effective time into, and shall have become, the right to receive the merger consideration, without interest thereon.

If the number of shares of Company common stock or securities convertible or exchangeable into or exercisable for shares of Company common stock issued and outstanding after the date of signing the merger agreement and prior to the effective time are changed into a different number of shares of Company common stock or securities or a different class as a result of a reclassification, stock split (including a reverse stock split), stock dividend or distribution, recapitalization, merger, issuer tender or exchange offer, or other similar transaction, the merger consideration will be equitably adjusted, without duplication, to provide the holders of shares of Company common stock the same economic effect contemplated by the merger agreement prior to such change.

The merger agreement contains customary representations and warranties made by the Company to Parent and Merger Sub that are subject, in some cases, to specified exceptions and qualifications contained in the merger agreement, in the Company disclosure letter or in certain SEC reports filed by the Company. In particular, certain of these representations and warranties are subject to materiality or “material adverse effect” qualifications (that is, they will not be deemed to be untrue or incorrect unless their failure to be true or correct is material or would result in a material adverse effect on the Company, as further described in the section entitled “—Material Adverse Effect” beginning on page 61 of this proxy statement). In addition, certain of the representations and warranties in the merger agreement are subject to knowledge qualifications, which means that those representations and warranties would not be deemed untrue, inaccurate or incorrect as a result of matters of which certain officers of the Company did not have actual knowledge.

In the merger agreement, the Company made representations and warranties to Parent and Merger Sub regarding, among other things:

The representations and warranties in the merger agreement of the Company will not survive the effective time.

Many of the Company’s representations and warranties in the merger agreement are qualified by, among other things, exceptions relating to the absence of a “material adverse effect”, which means any change, effect, event, occurrence or development (each of which we refer to as a “Change”) that (i) would prevent or materially impair or materially delay the consummation of the transactions contemplated by the merger agreement or (ii) individually or in the aggregate, has a material adverse effect on the business, condition (financial or otherwise) or results of operations of the Company and its subsidiaries, taken as a whole, except that no Change arising out of or resulting from any of the following will, either alone or in combination, constitute or contribute to a material adverse effect:

except, with respect to the first, second, third, seventh, eighth and ninth bullets above, in the case of Changes that disproportionally adversely affect the Company and its subsidiaries, taken as a whole, relative to similarly situated companies in the industries in which the Company and its subsidiaries conduct their respective operations, then the extent of such disproportionate impact will not be excluded and may be considered in determining whether there has been a material adverse effect.

The merger agreement also contains customary representations and warranties made by Parent and Merger Sub to the Company that are subject, in some cases, to specified exceptions and qualifications contained in the merger agreement or in the Parent disclosure letter. In particular, certain of these representations and warranties are subject to knowledge qualifications, which means that those representations and warranties would not be deemed untrue, inaccurate or incorrect as a result of matters of which certain officers of Parent did not have actual knowledge. The representations and warranties of Parent and Merger Sub relate to, among other things:

The representations and warranties in the merger agreement of each of Parent and Merger Sub will not survive the effective time.

Under the merger agreement, the Company has agreed to certain restrictions on the operation of its business until the earlier of the effective time and the termination of the merger agreement. In general, except for actions reasonably taken in connection with the De-Banking, the Company will use commercially reasonable efforts to carry on business in the ordinary course of business of the Company and its subsidiaries consistent with past practice, as such practice may have been reasonably affected public health events or public health event measures, in all material respects. In addition, except as specifically disclosed in the Company disclosure letter, as required by applicable law or with the written consent of Parent (which consent will not be unreasonably withheld, conditioned or delayed), the Company will not, and will not permit its subsidiaries to:

From the date of signing the merger agreement until the earlier of the effective time and the termination of the merger agreement, except as expressly permitted by the merger agreement, Parent will not take or permit its subsidiaries to take any action that is reasonably likely to prevent, or materially impair or delay, the consummation of the merger.

The merger agreement is not intended to give any of the parties to the merger agreement, directly or indirectly, the right to control or direct another party’s operations prior to the effective time. Prior to the effective time, each party will exercise, consistent with the terms and conditions of the merger agreement, complete control and supervision over its operations.

From the date of signing the merger agreement until the earlier of the effective time and the termination of the merger agreement, the Company is subject to restrictions on its ability to solicit third-party proposals relating to alternative transactions or to provide information to and engage in discussions or negotiations with a third party in relation to an alternative transaction (subject to certain exceptions prior to the time the Company shareholder approval is obtained as described further below). Specifically, the Company, its subsidiaries, and any officers, directors and management-level employees of it and its subsidiaries may not, and the Company must instruct and use its reasonable best efforts to cause its and its subsidiaries other employees, investment bankers, attorneys, accountants and other advisors or representatives (which we refer to as “representatives”) not to, directly or indirectly:

Under the merger agreement, an acquisition proposal means any inquiry, proposal or offer from any person or group of persons (other than Parent, Merger Sub or their respective affiliates) relating to (i) any acquisition or purchase directly or indirectly, in a single transaction or series of transactions, of a business that constitutes more than 15% of the net revenues, net income or consolidated assets of the Company and its subsidiaries, taken as a whole, or more than 15% of the total voting power of the equity securities of the Company, (ii) any tender offer or exchange offer that if consummated would result in any person beneficially owning more than 15% of the total voting power of the equity securities of the Company, or (iii) any merger, reorganization, consolidation, share exchange, business combination, recapitalization, liquidation, joint venture, partnership, dissolution or similar transaction involving directly or indirectly, in a single transaction or series of transactions, the Company (or any subsidiary or subsidiaries of the Company whose business constitutes more than 15% of the net revenues, net income or consolidated assets of the Company and its subsidiaries, taken as a whole). “Acquisition Proposal” does not include any transaction or series of transactions undertaken in connection with the De-Banking or any inquiry, proposal or offer solely with respect to any such transaction or series of transactions.

Except as permitted under the merger agreement, the Company agreed, upon execution of the merger agreement, to immediately cease any solicitation, discussions, or negotiations with any person (other than Parent, Parent’s affiliates and their respective representatives) with respect to any acquisition proposal or other proposal that could reasonably be expected to lead to an acquisition proposal that existed on or prior to the date of signing the merger agreement. The Company agreed that it would promptly request the return or destruction of all non-public information furnished by or on behalf of the Company to any person and its representatives (other than Parent, Parent’s affiliates and their respective representatives) with respect to any acquisition proposal prior to the date of signing the merger agreement. Any breach of the non-solicitation obligations described above by any subsidiary of the Company or any Company representative will be deemed a breach by the Company.

The Company must promptly (and, in any event, within 48 hours after receipt) notify Parent in writing of receipt by the Company of any acquisition proposal or any request for non-public information or inquiry relating to any acquisition proposal indicating the identity of the person making such acquisition proposal or request for non-public information or inquiry and the material terms and conditions of such acquisition proposal or request for non-public information or inquiry and copies of any documents evidencing or delivered in connection with any such acquisition proposal, request for non-public information or inquiry. The Company will keep Parent reasonably informed, on a prompt basis (but in any event within one business day of any such event), of any material developments, negotiations, communications, discussions or modifications to the terms of any such acquisition proposal or request for non-public information or inquiry.

Notwithstanding the foregoing restrictions, prior to the time the Company shareholder approval is obtained, in the event that the Company, any of its subsidiaries or its or their representatives receive from any person, after the date of the merger agreement, an unsolicited, bona fide written acquisition proposal that did not result from a breach of the non-solicitation provisions described above, and that the Company board determines in good faith, after consultation with its financial advisors and outside legal counsel, is, or is reasonably likely to lead to, a superior proposal, the Company may:

Under the merger agreement, a superior proposal means a bona fide, unsolicited written acquisition proposal that did not result from a breach of the non-solicitation provisions described above and relating to any direct or indirect acquisition or purchase of (i) assets that generate more than 50% of the consolidated total revenues or operating income of the Company and its subsidiaries, taken as a whole, (ii) assets that constitute more than 50% of the consolidated total assets of the Company and its subsidiaries, taken as a whole or (iii) more than 50% of the total voting power of the equity securities of the Company, in each case, that the Company board determines in good faith (x) is reasonably likely to be consummated in accordance with its terms, taking into account all legal, financial and regulatory aspects of the proposal and the person making the proposal and (y) if consummated, would result in a transaction more favorable to the Company shareholders from a financial point of view than the merger.

In the merger agreement, the Company board agreed to make the Company board recommendation to the Company shareholders. Subject to certain exceptions described below, the Company board and each committee of the Company board may not:

Notwithstanding any of the foregoing restrictions, prior to the time the Company shareholder approval is obtained, if the Company board determines in good faith, after consultation with its financial advisor and outside legal counsel, that an unsolicited, bona fide written acquisition proposal, received from any person after the date of the merger agreement that did not result from a breach of the non-solicitation provisions described above, constitutes a superior proposal, the Company board may, in response to such superior proposal, effect a Company adverse recommendation change or terminate the merger agreement (as described in the section below entitled “—Termination” beginning on page 79 of this proxy statement); provided, however, that, prior to taking any such actions, and as a condition precedent to taking any such actions:

The Company board may also effect a Company adverse recommendation change, prior to the time the Company shareholder approval is obtained, in response to an intervening event (as defined below) if the Company board determines in good faith, in consultation with its financial advisor and outside legal counsel, that the failure to effect a Company adverse recommendation change would be inconsistent with the Company board’s fiduciary duties under applicable law. However, the Company board may not take any such actions unless:

Under the merger agreement, an intervening event means any material fact or Change affecting the Company or any of its subsidiaries that only becomes known to the Company board after the date of the merger agreement (or if known as of or prior to the date of the merger agreement, the consequences of which were not known or reasonably foreseeable to the Company board as of the date of the merger agreement), except that in no event does the receipt, existence or terms of an acquisition proposal or any matter relating thereto or consequence thereof constitute an intervening event or be taken into account in determining whether an intervening event has occurred or would reasonably be expected to result.

Nothing in the merger agreement will prevent the Company or any of its subsidiaries from (i) complying with its disclosure obligations under U.S. federal or state law with regard to an acquisition proposal or (ii) making any disclosure to its shareholders, in each case, if the Company board or any of its subsidiaries determines in good faith (after consultation with and receiving advice of its outside legal counsel) that the failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable law.

The Company has agreed to hold a special meeting (which we refer to as the “Company shareholders meeting”) as promptly as practicable after clearance of this proxy statement by the SEC (and, in any event, within 45 days thereof) to consider and vote upon the adoption of the merger agreement. Subject to the provisions of the merger agreement discussed above under “—No Change in Board Recommendation; No Entry into Alternative Transactions” beginning on page 67 of this proxy statement, the Company board has agreed to recommend that the Company shareholders adopt the merger agreement in this proxy statement and take all lawful action to solicit such adoption of the merger agreement.

As a general matter, the Company, Parent and Merger Sub must (and must cause their respective subsidiaries to) cooperate and use their respective reasonable best efforts to take or cause to be taken all actions and do or cause to be done all things reasonably necessary, proper or advisable to consummate and make effective the merger and the other transactions contemplated by the merger agreement as soon as practicable, including (i) promptly making any required submissions and filings under applicable law or to governmental entities with respect to the merger and the other transactions contemplated by the merger agreement, (ii) promptly furnishing information requested in connection with such submissions and filings to such governmental entities or under such applicable law, (iii) keeping the other parties reasonably informed with respect to the status of any such submissions and filings to such governmental entities or under such applicable law, including with respect to: (A) the occurrence or receipt of any consents, approvals, clearances, authorizations under such applicable law, (B) the expiration or termination of any waiting period, (C) the commencement or proposed or threatened commencement of any investigation, litigation or administrative or judicial action or proceeding under such applicable law, and (D) the nature and status of any objections raised or proposed or threatened to be raised under such applicable law with respect to the merger or the other transactions contemplated by the merger agreement and (iv) obtaining all consents, approvals, clearances, authorizations and permits from any governmental entity necessary, proper or advisable to consummate the transactions contemplated by the merger agreement as soon as practicable. Parent will (x) be responsible for all fees associated with obtaining all consents, approvals, clearances, authorizations and permits pursuant to this provision of the merger agreement and (y) from time to time, promptly upon request by the Company, reimburse the Company and each of its subsidiaries for any and all reasonable, documented out-of-pocket fees, costs and expenses (including the reasonable fees, costs and expenses of counsel, accountants and other advisors) incurred by any of them in connection with the filing of any notices, reports and other filings, or obtaining all such consents, approvals, clearances, authorizations and permits.

The provisions in the merger agreement described under this “Filings; Other Actions; Notifications” section do not apply to the De-Banking.

The Company and Parent have agreed to cooperate with each other, to the extent not prohibited by applicable law and under the terms and subject to the conditions contained in the merger agreement, in connection with the obtaining the regulatory approvals described below, including by:

Parent and Merger Sub have agreed to take promptly any and all steps necessary to avoid, eliminate or resolve each and every impediment to and obtain all consents, approvals, clearances and authorizations under applicable laws that may be required by any governmental entity, so as to enable the parties to consummate the merger and the other transactions contemplated by the merger agreement as soon as practicable, including committing to and effecting, by consent decree, hold separate orders, trust, or otherwise, (i) selling, licensing, holding separate or otherwise disposing of assets or businesses of Parent or the Company or any of their respective subsidiaries, (ii) terminating, relinquishing, modifying, or waiving existing relationships, ventures, contractual rights, obligations or other arrangements of Parent or the Company or any of their respective subsidiaries and (iii) creating any relationships, ventures, contractual rights, obligations or other arrangements of Parent or the Company or any of their respective subsidiaries (which we refer to as a “remedial action”), provided that any remedial action will be conditioned upon consummation of the transactions contemplated by the merger agreement.

The Company and Parent have agreed to (i) make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated by the merger agreement as promptly as reasonably practicable following the date of the merger agreement, (ii) furnish as soon as practicable any additional information and documentary material that may be required or requested pursuant to the HSR Act and (iii) use its reasonable best efforts to take, or cause to be taken, all other actions consistent with their obligations under the foregoing provisions of the merger agreement necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act (including any extensions thereof) as soon as practicable.

In the event that any litigation or other administrative or judicial action or proceeding is commenced, threatened or is reasonably foreseeable challenging any of the transactions contemplated by the merger agreement and such litigation, action or proceeding seeks, or would reasonably be expected to seek, to prevent, materially impede or materially delay the consummation of such transactions, Parent shall take or cause to be taken any and all action, including a remedial action, to avoid or resolve any such litigation, action or proceeding as promptly as practicable. In addition, each of the Company, Parent and Merger Sub will cooperate with each other and use its respective reasonable best efforts to contest, defend and resist any such litigation, action or proceeding and to have vacated, lifted, reversed or overturned any order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents, delays, interferes with or restricts consummation of the transactions contemplated by the merger agreement as promptly as practicable.

The obligation of Parent and Merger Sub to effect the merger and the other transactions contemplated by the merger agreement is not contingent upon the receipt by Parent of any financing.

Parent and Merger Sub agreed to use their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to arrange, consummate and obtain the debt financing on the terms and conditions described in the debt financing commitment, including using reasonable best efforts to (i) maintain in effect the debt financing commitment, (ii) negotiate definitive agreements with respect thereto on terms and conditions contemplated by the debt financing commitment and execute and deliver to the Company a copy of any material definitive agreements promptly following such execution, (iii) promptly pay all commitment or other fees and amounts that become due and payable under or with respect to the debt financing commitment as they become due and payable, (iv) satisfy on a timely basis (or obtain a waiver of) all conditions to funding applicable to Parent and Merger Sub under the debt financing

commitment, (v) consummate the debt financing contemplated by the debt financing commitment at or prior to the closing of the merger on the terms and conditions set forth in the debt financing commitment and (vi) enforce their rights under the debt financing commitment, including seeking specific performance of the parties thereunder. Parent and Merger Sub have agreed that they will not, without the prior written consent of the Company (which may be withheld in its sole and absolute discretion), consent or agree to any amendment, supplement or modification to or assignment of, or any waiver of any provision under, the debt financing commitment or the definitive agreements relating to the debt financing. Parent and Merger Sub agreed to use their respective reasonable best efforts to refrain from taking, directly or indirectly, any action that could reasonably be expected to result in a failure of any of the conditions contained in the debt financing commitment or in any definitive agreement related to the debt financing. Parent has agreed to keep the Company informed on a reasonably current basis in reasonable detail of the status of its efforts to arrange the debt financing.

If any portion of the debt financing becomes unavailable or Parent or Merger Sub becomes aware of any event or circumstance that makes any portion of the debt financing unavailable on the terms and conditions contemplated in the debt financing commitment, Parent has agreed to promptly notify the Company (but in any event not later than twenty-four hours after such occurrence) and Parent and Merger Sub have agreed to use their respective reasonable best efforts to arrange and obtain alternative financing (which we refer to as the “alternative financing”) in an amount, when added with Parent and Merger Sub’s existing cash on hand, sufficient to consummate the transactions contemplated by the merger agreement as promptly as practicable following the occurrence of such event. Parent has agreed to deliver to the Company true, correct and complete copies of all agreements entered into with any such alternative source in connection with the alternative financing promptly following the execution thereof, although Parent is permitted to redact fee amounts from any fee letters required to be delivered pursuant to this sentence.

Parent has agreed to give the Company prompt oral and written notice (but in any event not later than twenty-four hours after such occurrence) if (i) to the knowledge of Parent, there exists any actual or anticipatory breach or default by any party to the debt financing commitment (or any circumstance or event that, with or without notice, lapse of time or both, would reasonably be expected to give rise to any such breach or default) or any condition which would reasonably be expected not to be satisfied, or any termination of the debt financing commitment, (ii) Parent or Merger Sub receives any notice or other communication from any financing source under the debt financing commitment with respect to any actual or anticipatory breach, or any default, termination or repudiation by any party to the debt financing commitment or definitive agreements related to the debt financing of any provisions of the debt financing commitment or definitive agreements related to the debt financing, and (iii) at any time for any reason Parent believes in good faith that it will not be able to obtain all or any portion of the debt financing on the terms and conditions, in the manner or from the sources contemplated by the debt financing commitment or definitive agreements related to the debt financing. As soon as reasonably practicable, but in any event within twenty-four hours of the delivery by the Company to Parent of a written request therefor, Parent has agreed to provide any information reasonably requested by the Company relating to any circumstance referred to in clause (i), (ii) or (iii) of the immediately preceding sentence.

Prior to the closing of the merger, Parent has agree not to (and not to permit any of its affiliates or representatives to) take any action, or enter into any transaction, or any agreement to effect any transaction that could reasonably be expected to (i) delay or impair the availability of the debt financing at closing or impede the satisfaction of the conditions to obtaining the debt financing at the closing or (ii) otherwise adversely impact the ability of Parent (or, if applicable, the Company) to enforce its rights against the other parties to the debt financing commitment or the definitive agreements with respect thereto.

Prior to the closing of the merger, the Company has agreed to use its commercially reasonable efforts to provide to Parent such cooperation as reasonably requested by Parent that is customary in connection with arranging and obtaining the debt financing as contemplated by the debt financing commitment, but unless expressly required in the merger agreement, the Company and its subsidiaries and their respective affiliates and representatives are not required to (i) provide any cooperation to the extent it would interfere unreasonably with the business or operations of the Company, any of its subsidiaries or any of their respective affiliates or representatives, (ii) pay any commitment or similar fee in connection with such financing, (iii) enter into any agreement, document or instrument in connection with any financing, (iv) provide any cooperation, or take any action, that, in the reasonable judgment of the Company, could cause the Company, any of its subsidiaries or any of their respective affiliates or representatives to incur any actual or potential liability, (v) provide any cooperation, or take any

action, that, in the reasonable judgment of the Company, would result in a violation of any confidentiality arrangement or material agreement or the loss of any attorney-client or other similar privilege, (vi) make any representation or warranty in connection with the debt financing or the marketing or arrangement thereof, (vii) prepare or deliver any financial statements or other financial information, (viii) provide any cooperation, or take any action, that would cause any representation or warranty in the merger agreement to be breached or any condition to the closing set forth in the merger agreement to fail to be satisfied, (ix) cause any member of the board of directors (or similar governing body) of the Company, any of its subsidiaries or any of their respective affiliates or representatives to adopt or approve any written consent, resolution or similar approval in respect of the debt financing or any agreements or instruments entered into in connection therewith or (x) provide any cooperation, or take any action, following the closing of the merger.

Parent and Merger Sub have agreed to use their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to arrange, consummate and obtain the equity financing on the terms and conditions described in the equity financing commitment, including taking all actions necessary to (i) maintain in effect the debt financing commitment, (ii) consummate the equity financing contemplated by the equity financing commitment at or prior to the closing of the merger on the terms and conditions set forth in the equity financing commitment and (iii) enforce their rights under the equity financing commitment, including seeking specific performance of the parties’ funding obligations thereunder. Parent and Merger Sub have agreed not to, without the prior written consent of the Company (which may be withheld in its sole and absolute discretion), consent or agree to any amendment, supplement or modification to or assignment of, or any waiver of any provision under, the equity financing commitment if such amendment, supplement or modification to or assignment of, or any waiver of any provision under, would, or would reasonably be expected to (x) reduce the aggregate amount of the equity financing commitment or (y) impose new or additional conditions to the receipt of the financing under the equity financing commitment. Parent and Merger Sub have agreed to use their respective reasonable best efforts to refrain from taking, directly or indirectly, any action that could reasonably be expected to result in a failure of any of the conditions contained in the equity financing commitment. Parent has agreed to keep the Company informed on a reasonably current basis in reasonable detail of the status of its efforts to arrange the equity financing.

Parent has agreed to give the Company prompt oral and written notice (but in any event not later than twenty-four hours after such occurrence) if (i) to the knowledge of Parent, there exists any actual or anticipatory breach or default by any party to the equity financing commitment (or any circumstance or event that, with or without notice, lapse of time or both, would reasonably be expected to give rise to any such breach or default) or any condition which would reasonably be expected not to be satisfied, or any termination of the equity financing commitment, (ii) Parent or Merger Sub receives any notice or other communication from any financing source under the equity financing commitment with respect to any actual or anticipatory breach, or any default, termination or repudiation by any party to the equity financing commitment of any provisions of the debt financing commitment, and (iii) at any time for any reason Parent believes in good faith that it will not be able to obtain all or any portion of the equity financing on the terms and conditions, in the manner or from the sources contemplated by the equity financing commitment. As soon as reasonably practicable, but in any event within twenty-four hours of the delivery by the Company to Parent of a written request therefor, Parent has agreed to provide any information reasonably requested by the Company relating to any circumstance referred to in clause (i), (ii) or (iii) of the immediately preceding sentence.

Following the effective time and until the first anniversary of the date of the closing (which we refer to as the “continuation period”), Parent has agreed to provide, or cause the surviving corporation to provide, the individuals who are employed by the Company or any of its subsidiaries immediately before the effective time (which we refer to as the “Company employees”) and who continue employment during such time period with (i) annual base compensation no less than the annual base compensation provided to such Company employees immediately prior to the effective time, (ii) annual target cash incentive amounts that are no less than the annual target cash incentive amounts provided to such Company employees immediately prior to the effective time,

(iii) severance benefits that are no less favorable than the severance benefits provided to such Company employees immediately prior to the effective time and (iv) other employee benefits that are substantially comparable in the aggregate to the employee benefits provided to such Company employees immediately prior to the effective time.

From and after the effective time, Parent has agreed to, or cause the surviving corporation to, assume, honor and continue during the continuation period or, if later, until all obligations thereunder have been satisfied, all of the Company’s employment, severance, retention, termination and change in control plans, policies, programs, agreements and arrangements maintained by the Company or any of its subsidiaries, in each case, as in effect at the effective time, including with respect to any payments, benefits or rights arising as a result of the transactions contemplated by the merger agreement (either alone or in combination with any other event), without any amendment or modification, other than any amendment or modification required to comply with applicable law.

With respect to all plans maintained by Parent, the surviving corporation or their respective subsidiaries in which the Company employees are eligible to participate after the date of the closing (including any vacation, paid time-off and severance plans) for purposes of determining eligibility to participate, level of benefits and vesting, each Company employee’s service with the Company or any of its subsidiaries (as well as service with any predecessor employer of the Company or any such subsidiary, to the extent service with the predecessor employer is recognized by the Company or such subsidiary) will be treated as service with Parent, the surviving corporation or any of their respective subsidiaries, in each case, to the extent such service would have been recognized by the Company or its subsidiaries under analogous Company benefit plans prior to the effective time; provided, however, that such service need not be recognized to the extent that such recognition would result in any duplication of benefits for the same period of service.

Parent has agreed to, or cause the surviving corporation to, waive any pre-existing condition limitations, exclusions, actively-at-work requirements and waiting periods under any welfare benefit plan maintained by Parent, the surviving corporation or any of their respective subsidiaries in which Company employees (and their eligible dependents) will be eligible to participate from and after the effective time, except to the extent that such pre-existing condition limitations, exclusions, actively-at-work requirements and waiting periods would not have been satisfied or waived under the comparable Company benefit plan immediately prior to the effective time. Parent has agreed to, or cause the surviving corporation to, recognize the dollar amount of all co-payments, deductibles and similar expenses incurred by each Company employee (and his or her eligible dependents) during the calendar year in which the effective time occurs for purposes of satisfying such year’s deductible and co-payment limitations under the relevant welfare benefit plans in which they will be eligible to participate from and after the effective time.

The Company has agreed to promptly notify Parent of, and give Parent the opportunity to participate in, subject to a customary joint defense agreement, but not control the defense, settlement and/or prosecution of, any legal proceeding (including derivative claims) brought by any shareholders of the Company against the Company and/or members of the Company board relating to the merger or the other transactions contemplated by the merger agreement (which we refer to as “transaction litigation”). The Company has agreed to keep Parent reasonably informed with respect to the status of any transaction litigation brought against the Company and not to compromise, settle, come to an arrangement regarding or agree to compromise, settle or come to an arrangement regarding any transaction litigation, or consent to the same, without the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed).

From and after the effective time, Parent has agreed to cause the surviving corporation to indemnify and hold harmless, to the fullest extent permitted under applicable law, each present and former director and officer of the Company and its subsidiaries (in each case, solely when acting in such capacity) (which we refer to as the “indemnified parties”) from and against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities (which we refer to as “costs”) incurred in connection with any legal proceeding, claim or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to matters existing or occurring at or prior to the effective time relating to the indemnified party’s service with, at the request of or for the benefit of the Company or any of its subsidiaries, including the

transactions contemplated by the merger agreement. From and after the effective time, Parent has agreed to cause the surviving corporation to advance expenses to any indemnified party claiming indemnification pursuant to this provision as incurred to the fullest extent permitted under applicable law so long as such indemnified party provides a written undertaking to repay such advances if it is ultimately determined that such indemnified party is not entitled to indemnification.

From and after the effective time, Parent has agreed to cause the surviving corporation to honor the provisions, to the extent they are enforceable under applicable law, regarding (i) exculpation of directors, (ii) limitation of liability of directors and officers and (iii) advancement of expenses, in each case, contained in the Company’s articles of incorporation, bylaws, the comparable organizational documents of any of the Company’s subsidiaries or any indemnification agreement between the applicable indemnified party and the Company or any of its subsidiaries as of immediately prior to the effective time.

From and after the effective time, Parent has agreed to cause the surviving corporation to maintain for a period of at least six years following the effective time directors’ and officers’ liability insurance and fiduciary liability insurance policies (which we refer to as “D&O insurance”) from an insurance carrier with the same or better credit rating as the Company’s current insurance carrier with benefits, levels of coverage and terms and conditions at least as favorable as the Company’s D&O insurance existing immediately prior to the effective time with respect to matters existing or occurring at or prior to the effective time, including for acts or omissions in connection with the merger agreement and the consummation of the transactions contemplated by the merger agreement. Notwithstanding the foregoing, in no event will Parent or the surviving corporation be required to expend for such D&O insurance coverage an annual premium amount greater than 300% of the annual premiums currently paid by the Company for D&O insurance as of the date of the merger agreement (we refer to such amount as the “maximum annual premium”). If such D&O insurance is not reasonably available or the annual premium of such D&O insurance exceeds the maximum annual premium, Parent has agreed to cause the surviving corporation to obtain D&O insurance with the greatest coverage available for an annual premium not exceeding the maximum annual premium.

The Company may, in its sole discretion but following consultation with Parent, prior to the effective time, purchase six-year pre-paid and non-cancellable “tail” insurance coverage (which we refer to as “tail D&O insurance”) at an aggregate cost no greater than the maximum annual premium, providing for D&O insurance not less favorable than that described in the paragraph above. Any such tail D&O insurance must expressly cover Parent and the surviving corporation as successors in interest. If the Company has obtained such tail D&O insurance pursuant, Parent will cause the tail D&O insurance to be maintained in full force and effect for its full term and cause all obligations thereunder to be honored by the surviving corporation.

Subject to certain exceptions, all costs and expenses incurred in connection with the merger agreement and the merger and the other transactions contemplated by the merger agreement will be paid by the party incurring such expenses, whether or not the merger is consummated.

Subject to the terms and conditions set forth in the merger agreement, the Company has agreed to, and to cause each of its subsidiaries to, use reasonable best efforts to take or cause to be taken all reasonable actions, and do or cause to be done all things, reasonably necessary or advisable to effect the De-Banking as soon as reasonably practicable, including (i) promptly making any submissions and filings required under applicable law in order to effect the De-Banking, (ii) promptly furnishing information requested in connection with such submissions and filings under such applicable law, (iii) keeping Parent and Merger Sub reasonably informed with respect to the status of any such submissions and filings under such applicable law and (iv) obtaining all consents, approvals, clearances, authorizations and permits from any governmental entity necessary to effect the De-Banking as soon as reasonably practicable. The Company has agreed to file or cause to be filed the plan of liquidation with respect to the De-Banking and any other related applications as be required (which we refer to as the “plan”) with the Federal Reserve Board, the Federal Reserve Bank of San Francisco, the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (which we refer to as the “FDIC”) no later than forty-five days following the date of the merger agreement. The Company made the applicable filings on June 2, 2021. On June 25, 2021, the Company received the requisite non-objections to the Company’s plan of liquidation

and has begun implementing the plan. For the avoidance of doubt, the Company may incur, in its sole and absolute discretion, any amount of Covered Costs in connection with the De-Banking and its effectuation thereof, including any Covered Costs in excess of $8,000,000.

De-Banking means a transaction or a series of transactions which results in (i) (A) the Company having divested its entire ownership interest in MBB or (B) (1) the Company having submitted a letter to the Commissioner of the Utah Department of Financial Institutions surrendering the license and authority to conduct the business of banking held by MBB, (2) the FDIC having issued an order terminating MBB’s deposit insurance from the FDIC and (3) MBB having no remaining deposits and (ii) if the merger were consummated, none of Parent, Merger Sub, or their respective affiliates, directors, officers, principals or limited partners being subject to any burdensome condition or burdensome requirement imposed by any banking regulator or banking law (this clause (ii) is not intended to apply to the Company or any of its subsidiaries so that this clause (ii) shall not be deemed unsatisfied on account of the Company or any of its subsidiaries being subject to any burdensome condition or burdensome requirement imposed by any banking regulator or banking law).

The Company has agreed that it shall not, and that it shall cause its subsidiaries not to, renew any deposits that would mature between the date that is eight months after the date of the merger agreement and the effective time. In connection with the De-Banking, the Company has agreed that it shall and shall cause its subsidiaries to use reasonable best efforts to (i) allow all deposit insurance from the FDIC with respect to any deposits lapse or otherwise terminate to the extent permitted under the terms of any agreements applicable to such deposits and applicable law and (ii) payoff or settle the deposits at par value plus any interest accrued thereon.

The Company has agreed that it shall cause all loans, leases and equipment owned by MBB or in which it has an interests, together will all security interests, guarantees, insurance and other agreements and obligations supporting such loans and leases or insuring such equipment, all financing statements related thereto, all collection accounts on which payments thereon are made, and all records, computer files and other data relating thereto (which we refer to as the “assets”) to be transferred to a subsidiary of the Company prior to the De-Banking, and use reasonable best efforts to cause such transfers to occur on terms and conditions that (i) comply with applicable law and (ii) are consistent with the intended use of such assets as collateral for the interim De-Banking financing and the Parent De-Banking financing described below. The Company has agreed to provide reasonable notice to Parent, Merger Sub and their counsel in advance of such transfers and shall work in good faith with Parent, Merger Sub and their counsel to cause such transfers to be on commercially reasonable terms and consistent with the plan and the debt financing commitment and to be executed in compliance with applicable law in all material respects.

Parent and Merger Sub have agreed to use reasonable best efforts to take or cause to be taken all actions, and do or cause to be done all things, reasonably necessary or advisable to effect the De-Banking as soon as reasonably practicable and to provide all cooperation reasonably requested by the Company in connection with the De-Banking. None of Parent, Merger Sub, or their respective affiliates, directors, officers, principals or limited partners are required to make, or become party to, any application, notice or filing with, or to agree to or accept the imposition of any burdensome condition or burdensome requirement imposed by any banking regulator or banking law in connection with the De-Banking, the Company’s ownership, control or winding down of MBB, or the Company’s depository institution business (this sentence is not intended to apply to the Company or any of its subsidiaries such that this sentence shall not be deemed breached on account of the Company or any of its subsidiaries being subject to any burdensome condition or burdensome requirement imposed by any such banking regulator or any such banking law).

Each of Parent and the Company have acknowledged and agreed that (i) the Company will require interim debt financing in connection with the De-Banking (which we refer to as the “interim De-Banking financing”), (ii) the Company may potentially obtain interim De-Banking financing from the financing sources for the merger consideration on terms and conditions substantially similar to those set forth in the debt financing commitment (which we refer to as the “Parent De-Banking financing”) and (iii) subject to the terms of the merger agreement, the Company may, in its sole discretion, elect to arrange for, consummate and obtain interim De-Banking financing from a third party in lieu of any Parent De-Banking financing. Prior to executing any commitment letter with respect to any interim De-Banking financing that is not Parent De-Banking financing, the Company has agreed to provide Parent with at least ten business days’ prior written notice of the Company’s intention to take such action (which notice must include a reasonably detailed description of the terms of such interim De-Banking financing) during which period Parent and the financing sources may propose revisions to the terms

of the Parent De-Banking financing. If following such ten business day period, (A) Parent and the financing sources shall have irrevocably revised the terms of the Parent De-Banking financing such that they are no less favorable or more favorable than the terms of such interim De-Banking financing, then the Company has agreed to arrange for, consummate and obtain such Parent De-Banking financing and not such interim De-Banking financing and Parent has agreed to cause the financing sources to (1) provide the Company the Parent De-Banking financing (reflecting any revised terms proposed by Parent and the financing sources) as promptly as practicable thereafter and (2) execute and deliver a debt financing commitment letter with respect to such Parent De-Banking financing no later than two business days prior to the date on which the Company is required under the terms of the merger agreement to first file the plan in accordance with the De-Banking provisions of the merger agreement or (B) if the terms of such interim De-Banking financing remain more favorable than the terms of such Parent De-Banking financing (taking into consideration any revised terms proposed by Parent and the financing sources), as reasonably determined by the Company, then the Company may arrange for, consummate and obtain such interim De-Banking financing in its discretion. If at any time the Company determines to arrange for, consummate and obtain the Parent De-Banking financing in lieu of any other interim De-Banking financing, Parent has agreed to cause the financing sources to (x) provide the Company the Parent De-Banking financing (reflecting any revised terms proposed by Parent and the financing sources) as promptly as practicable thereafter and (y) execute and deliver a debt financing commitment letter with respect to such Parent De-Banking financing no later than two business days prior to the date on which the Company is required under the terms of the merger agreement to first file the plan. The Company has agreed not to obtain any interim De-Banking financing with terms reflecting any prepayment fee or penalty in excess of $1,000,000, or which cannot be prepaid with full release of liens at closing of the merger, or that would otherwise interfere with the ability of Parent and Merger Sub to consummate the debt financing commitment, in each case without Parent’s prior written consent (which consent not to be unreasonably withheld, conditioned or delayed).

The Company agreed to use its reasonable best efforts to provide such cooperation as reasonably requested by Parent in connection with Parent obtaining the permits necessary, following the closing, for the Company and its subsidiaries to own, lease and operate their properties and assets and to carry on their businesses, including for compliance with laws applicable to a non-bank entity in connection therewith relating to the origination, servicing, disclosures, unfair and deceptive acts and practices, debt collection, credit and financial services (which we refer to as “state licenses”) on behalf of the Company and its subsidiaries at or prior to the closing, which cooperation shall include submitting or making, on Parent’s behalf, with the applicable governmental entities any filings or applications with respect to obtaining the state licenses prepared by Parent and its representatives. Unless required in the merger agreement, the Company and its subsidiaries and of their respective affiliates and representatives are not required to (i) provide any cooperation to the extent it would interfere unreasonably with the business or operations of the Company, any of its subsidiaries or any of their respective affiliates or representatives, (ii) provide any cooperation, or take any action, that, in the reasonable judgment of the Company, would reasonably be expected to cause the Company, any of its subsidiaries or any of their respective affiliates or representatives to incur any actual or potential liability, (iii) provide any cooperation, or take any action, that, in the reasonable judgment of the Company, would result in a violation of any confidentiality arrangement or material agreement or the loss of any attorney-client or other similar privilege, or (iv) provide any cooperation, or take any action, that would cause any representation or warranty in the merger agreement to be breached or any condition to the closing set forth in the merger agreement to fail to be satisfied unless Parent agrees in writing to waive any such breach of representation or warranty or to deem any such condition to the closing satisfied in order to obtain one or more state licenses.

Parent agreed to pay all costs and fees associated with obtaining the state licenses. Parent agreed to indemnify the Company, each of its subsidiaries and each of their respective affiliates and representatives against, be liable to such person for and hold each such person harmless from, any and all costs incurred or suffered by any such person under or in connection with obtaining the state licenses or any of their cooperation or assistance with respect to obtaining the state licenses or the provision of any information utilized in connection therewith or otherwise arising from obtaining the state licenses, in each case only to the extent arising as of or following the date of the merger agreement and not relating to actions prior to the date of the merger agreement. Parent must from time to time, promptly upon request by the Company, reimburse the Company, each of its subsidiaries and each of their respective affiliates and representatives for any and all reasonable, documented out-of-pocket fees, costs or expenses (including reasonable fees, costs and expenses of counsel, accountants and other advisors)

incurred by any of them in connection with any of their cooperation or assistance with respect to the state licenses. The Company agreed to keep Parent reasonably apprised, on a monthly basis, as to the amount of any such costs or expenses that have been incurred as of such date.

Unless required in the merger agreement, Parent, Merger Sub, and their respective affiliates, directors, officers, principals or limited partners are not required to (i) make, or become party to, any application, notice or filing with respect to any state license or provide any guarantee or, directly or indirectly, accept any fine or penalty in connection therewith or (ii) agree to, or accept the imposition of, any changes arising directly as a result obtaining the state licenses that would have, in the aggregate, a material adverse effect on the Company and its subsidiaries (other than MBB), taken as a whole.

The merger agreement contains certain other covenants and agreements between the Company, Parent and Merger Sub, including covenants and agreements relating to:

Each of the Company’s, Parent’s and Merger Sub’s obligation to effect the merger is subject to the satisfaction or (to the extent permitted by law) waiver at or prior to the closing of each of the following conditions:

The obligations of Parent and Merger Sub to effect the merger are further subject to the satisfaction or (to the extent permitted by law) waiver at or prior to the closing of each of the following conditions:

The obligations of the Company to effect the merger are further subject to the satisfaction or (to the extent permitted by law) waiver at or prior to the closing of each of the following conditions:

The merger agreement may be terminated and the merger may be abandoned at any time prior to the effective time, whether before or after (except as set forth below) the Company shareholders’ approval, under the following circumstances:

The Company will be required to pay Parent a termination fee equal to $10,325,000 if:

If the merger agreement is terminated pursuant to the first bullet above, the termination fee must be paid on the date of termination. If the merger agreement is terminated pursuant to the second bullet above, the termination fee must be paid on the date a definitive agreement for the acquisition proposal is executed. If the merger agreement is terminated pursuant to the third bullet above, the termination fee must be paid within two business days of the date of termination. The Company will not be required under any circumstances to pay the termination fee on more than one occasion.

Parent will be required to pay the Company a Parent termination fee equal to $20,650,000 if:

If the merger agreement is terminated pursuant to any of the two bullets above, the Parent termination fee must be paid within two business days of termination. Parent will not be required under any circumstances to pay the Parent termination fee on more than one occasion.

The Company, Parent and Merger Sub have agreed that each party to the merger agreement are entitled to an injunction, specific performance and other equitable relief to prevent breaches of the merger agreement and to enforce specifically the terms and provisions thereof, in addition to any other remedy to which it is entitled at law or in equity. Each of the parties further agreed that it will not oppose the granting of an injunction, specific

performance and other equitable relief as provided in the merger agreement on the basis that (A) the other party has an adequate remedy at law or (B) an award of specific performance is not an appropriate remedy for any reason at law or equity. Any party to the merger agreement seeking an injunction or injunctions to prevent breaches of the merger agreement and to enforce specifically the terms and provisions of the merger agreement are not be required to provide any bond or other security in connection with any such order or injunction.

Parent and Merger Sub have acknowledged that the Company is a third party beneficiary of the equity financing commitment and that, pursuant to the terms thereof, the Company is entitled to seek specific performance of Parent’s and the Guarantors’ obligations to cause the equity financing to be funded in connection with the consummation of the transactions contemplated by the merger agreement, but only in the event, that (1) all of the conditions to closing set forth in the merger agreement have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or waiver of those conditions at the closing); (2) Parent and Merger Sub fail to complete the closing in accordance with the provisions of the merger agreement; (3) the Company has irrevocably confirmed in a written notice to Parent and Merger Sub that if specific performance is granted and each of the equity financing and the debt financing (or the alternative financing) is funded, then the Company would take such actions that are required of it by the merger agreement to cause the closing to occur; and (4) the debt financing (or the alternative financing, as the case may be) has been funded (or will be funded at the closing if the equity financing is funded at the closing).

While a party to the merger agreement may concurrently seek (x) specific performance or other equitable relief to consummate the transactions contemplated by the merger agreement, and (y) payment of any of a termination fee if, as and when required pursuant to the merger agreement, under no circumstances will such party receive both the relief contemplated by the foregoing clause (x) and the foregoing clause (y).

Aside from the equitable relief described above, the Company’s sole and exclusive remedy under the merger agreement is the right to receive the Parent termination fee. If the Company has received the Parent termination fee and the reimbursement of the costs and expenses contemplated by the merger agreement and the limited guarantee, then none of Parent, Merger Sub or any of their affiliates shall have any liability or obligation with respect to any losses or damages suffered by the Company or any of its affiliates in connection with the merger or the merger agreement.

Subject to applicable law, the merger agreement may be amended or modified by the Company, Parent or Merger Sub at any time prior to the effective time (in the case of the Company or Merger Sub, by action of their respective board of directors to the extent required by law) by written agreement, executed and delivered by duly authorized officers of the Company, Parent and Merger Sub, provided that certain provisions of the merger agreement may not be modified or waived in a manner adverse to an equity or debt financing related party without the prior written consent of the related debt financing source.

At any time prior to the effective time, the Company, Parent or Merger Sub may: extend the time for the performance of any of the obligations or other acts of the other parties; to the extent permitted by law, waive any inaccuracies in the representations and warranties of the other parties in the merger agreement or in any other document delivered pursuant thereto; and, subject to the requirements of applicable law, waive compliance with any of the agreements or conditions contained in the merger agreement, except that neither Parent nor Merger Sub may perform any of the actions described above with respect to Merger Sub or Parent, respectively. Such extensions or waivers will only be valid if set forth in a writing signed by the party or parties to be bound thereby and specifically referencing the merger agreement. The failure of the Company, Parent or Merger Sub to assert any of their respective rights or remedies will not constitute a waiver of such rights or remedies.

On April 18, 2021, in connection with the execution of the merger agreement, Parent entered into the voting agreement with the RM Parties. The following is a summary of selected material provisions of the voting agreement. The discussion is subject to, and qualified in its entirety by reference to, the voting agreement attached as Annex D to this proxy statement and incorporated herein by reference. We urge you to read carefully this entire proxy statement, including the voting agreement attached as Annex D, for a more complete understanding of the merger.

In order to induce Parent to enter into the merger agreement, concurrently with the execution and delivery of the merger agreement on April 18, 2021, the RM Parties entered into the voting agreement with Parent. Based solely on a Schedule 13D/A jointly filed on April 21, 2021 by the RM Parties and certain of its related persons, the RM Parties beneficially owned 2,956,925 shares of Company common stock, representing approximately 24.57% of the total outstanding shares of Company common stock as of the June 25, 2021 record date for the special meeting.

Pursuant to the voting agreement, the RM Parties have agreed, among other things, that with respect to all of their subject shares: (a) when a meeting of the Company shareholders is held, they will appear at such meeting or otherwise cause their subject shares to be counted as present for the purpose of establishing a quorum and (b) they will vote or cause to be voted at any such meeting all of their subject shares (i) in favor of adopting the merger agreement and any other actions contemplated by the merger agreement in respect of which the approval of the Company shareholders is requested, (ii) in favor of adopting of any proposal in respect of which the Company board has (A) determined is reasonably necessary to facilitate any of the transactions contemplated by the merger agreement, (B) disclosed the determination described in the foregoing clause (A) in the proxy statement or other written materials disseminated to the holders of shares of Company common stock and (C) recommended to be adopted or approved by the holders of shares of Company common stock, and (iii) against (A) any acquisition proposal, whether or not constituting a superior proposal, and (B) any action, proposal, transaction or agreement that would reasonably be expected to prevent, impair, delay or otherwise interfere with the consummation of the merger or the other transactions contemplated by the merger agreement.

The RM Parties have agreed to not to, directly or indirectly (a) (i) transfer, or enter into any contract, option or other arrangement or understanding with respect to the transfer of, any subject shares to any person or entity, or (ii) enter into any voting arrangement, whether by proxy, voting agreement or otherwise, or grant a proxy or power of attorney with respect to any subject shares, or deposit any subject shares into a voting trust, or (b) (i) initiate, solicit or knowingly take any action to facilitate, solicit or encourage any acquisition proposal or the making of any proposal that would reasonably be expected to lead to an acquisition proposal or (ii) participate in any discussions or negotiations regarding, or furnish or provide any non-public information to any person or entity in connection with, any acquisition proposal; provided, that in the event a person or entity submits an acquisition proposal to the Company, such holder and its representatives may hold discussions with such person or entity solely with respect to the terms of a proposed voting agreement with respect to the transaction contemplated by such acquisition proposal following such time as the Company determines that the Company board may, subject to the terms of the merger agreement, accept a superior proposal or make a change of recommendation in response to a superior proposal or intervening event.

The voting agreement terminates automatically upon the first to occur of (a) the conclusion of the special meeting (giving effect to any postponement or adjournment thereof), (b) the termination of the merger agreement in accordance with its terms, (c) with respect to an RM Party, the disposition of all of its subject shares as permitted by the voting agreement, (d) the date of approval by the Company of any modification, amendment or waiver of or to the merger agreement as in effect as of the date of the voting agreement which the RM Parties believe has a material adverse effect on the consideration payable to the Company shareholders upon the consummation of the Merger, (e) the occurrence of a change of recommendation as permitted under the terms of the merger agreement or (f) with respect to any RM Party, the mutual written agreement of such RM Party and Parent.

The voting agreement is governed by Delaware law.

For purposes of this section, the term “Company” will be deemed to refer also to the surviving corporation with respect to actions taken after the effective time. Pursuant to the merger agreement and the PBCL, the owners of Company common stock will have dissenters’ rights in connection with the merger under Sections 1571 through 1580 of Subchapter 15D of the PBCL (which we refer to as “Subchapter 15D”), a copy of which (as well as a copy of 15Pa.C.S. Section 333(d)) is included in this proxy statement as Annex C, and may object to the merger agreement and demand in writing that the Company pay the fair value of their Common Stock. Holders of Company common stock may request a copy of the Company’s articles of incorporation and bylaws in accordance with Section 321(b) of the PBCL.

If any holders of Company common stock properly exercise dissenters’ rights in connection with the merger under Subchapter 15D (which we refer to as a “Dissenting Shareholder”), any shares held by such holders will not be converted into the right to receive the merger consideration, but instead will be converted into the right to receive the “fair value” of such shares pursuant to Subchapter 15D.

THE FOLLOWING SUMMARY OF THE PROVISIONS OF SUBCHAPTER 15D IS NOT INTENDED TO BE A COMPLETE STATEMENT OF SUCH PROVISIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUBCHAPTER 15D, A COPY OF WHICH (AS WELL AS A COPY OF 15PA.C.S. SECTION 333(d)) IS ATTACHED TO THIS PROXY STATEMENT AS ANNEX C AND INCORPORATED HEREIN BY REFERENCE.

The Company will not give any notice of the following requirements other than as described in this proxy statement and as required by the PBCL.

Any holder of Company common stock who has duly demanded the payment of the fair value of his or her shares under Subchapter 15D will not, after the effective time, be a shareholder of the Company for any purpose or be entitled to the payment of dividends or other distributions on any such common stock; moreover, the Company common stock of any Dissenting Shareholder will be converted into the right to receive either (i) the fair value of such common stock, determined in accordance with Subchapter 15D, or (ii) the right to receive the merger consideration, if any Dissenting Shareholder effectively withdraws his or her demand for appraisal rights.

SHAREHOLDERS OF THE COMPANY SHOULD NOTE THAT, UNLESS ALL THE REQUIRED PROCEDURES FOR CLAIMING DISSENTERS’ RIGHTS ARE FOLLOWED WITH PARTICULARITY, DISSENTERS’ RIGHTS WILL BE LOST. VOTING AGAINST APPROVAL AND ADOPTION OF THE MERGER AGREEMENT, WHETHER IN PERSON OR BY PROXY, IS NOT SUFFICIENT NOTICE TO PERFECT DISSENTERS’ RIGHTS.

Before any shareholder vote is taken on the merger agreement, a Dissenting Shareholder must deliver to the Company a written notice of his or her intention to demand the fair value of his or her Company common stock if the merger is effected. Such written notice may be sent to the Corporate Secretary of the Company at the Company's address set forth on Page 21 of this proxy statement. Neither the return of a proxy by the Dissenting Shareholder with instructions to vote the Company common stock represented thereby against the adoption of the merger agreement nor a vote against the adoption of the merger agreement or an abstention from voting on the adoption of the merger agreement is sufficient to satisfy the requirement of delivering a written notice to the Company.

In addition, the Dissenting Shareholder must not effect any change in the beneficial ownership of his or her Company common stock from the date of filing the notice with the Company through the effective time, and the Dissenting Shareholder must not vote his or her Company common stock for which payment of fair value is sought in favor of the adoption of the merger agreement. The submission of a signed blank proxy will serve to waive appraisal rights if not revoked, but a failure to vote, a vote against or an abstention from voting on the adoption of the merger agreement will not waive such rights. Proper revocation of a signed blank proxy or a signed proxy instructing a vote for adoption of the merger agreement will also preserve dissenters’ rights under the PBCL.

Failure by a Dissenting Shareholder to comply with any of the foregoing will result in such Dissenting Shareholder's forfeiting any right to payment of the fair value of such Dissenting Shareholder's common stock.

A record holder of Company common stock may assert dissenters’ rights as to fewer than all the Company common stock of the same class or series registered in his or her name only if the holder dissents with respect to all the Company common stock beneficially owned by any one person and discloses the name and address of the person or persons on whose behalf he or she dissents.

A beneficial owner of Company common stock who is not the record holder may assert dissenters’ rights with respect to Company common stock held on his or her behalf if such Dissenting Shareholder submits to the Company the written consent of the record holder not later than the time of assertion of dissenters’ rights. The beneficial owner may not dissent with respect to less than all the Company common stock he or she beneficially owns, whether or not such Company common stock is registered in the beneficial owner’s name.

If the merger is adopted by the requisite vote at the special meeting, the Company will mail to all Dissenting Shareholders who gave due notice of their intention to demand payment of fair value and who refrained from voting in favor of the merger a notice stating where and when a demand for payment must be sent, and stock certificates representing the Company common stock held by the Dissenting Shareholder must be deposited to obtain payment.

The notice will be accompanied by a copy of Subchapter 15D of the PBCL and include a form for demanding payment, which form will have a request for certification of the date that beneficial ownership of the Company common stock was acquired by the Dissenting Shareholder or the person on whose behalf the Dissenting Shareholder dissents. The time set for the receipt of a demand and the Dissenting Shareholder’s stock certificates will not be less than 30 days from the mailing of the notice. Failure by a Dissenting Shareholder to timely demand payment and deposit the stock certificates pursuant to such notice will cause such Dissenting Shareholder to lose all right to receive payment of the fair value of his or her Company common stock.

All mailings to the Company are at the risk of the Dissenting Shareholder. However, the Company recommends that the notice of intention to dissent, the demand form and the holder’s stock certificates be sent by certified mail. If the merger has not been effected within 60 days after the date set for demanding payment and depositing stock certificates, the Company will return any stock certificates that have been deposited. The Company, however, may at any later time send a new notice regarding demand for payment and deposit of stock certificates with like effect.

Promptly after the effective time, or upon timely receipt of demand for payment if the merger has already been effected, the Company will either remit to Dissenting Shareholders who have made demand and deposited their stock certificates the amount the Company estimates to be the fair value of the Company common stock or give written notice that no remittance will be made under Section 1577 of the PBCL. Such remittance or notice will be accompanied by: (i) the Company’s closing balance sheet and statement of income for a fiscal year ending not more than 16 months prior to the date of remittance or notice, together with the latest available interim financial statements; (ii) a statement of the Company’s estimate of the fair value of the Company common stock; and (iii) a notice of the right of a Dissenting Shareholder to demand payment or supplemental payment, as the case may be, accompanied by a copy of Subchapter 15D.

If the Company does not remit the amount of its estimate of the fair value of the Company common stock, it will return all stock certificates that have been deposited and may make a notation thereon that a demand for payment has been made. If shares carrying such notation are thereafter transferred, each new stock certificate issued therefor will bear a similar notation, together with the name of the original dissenting holder or owner of such shares. A transferee of such shares will not acquire by such transfer any rights in the Company other than those which the original dissenter had after making demand for payment of their fair value.

If a Dissenting Shareholder believes that the amount estimated or paid by the Company for his or her Company common stock is less than their fair value, the Dissenting Shareholder may send to the Company his or her own

estimate of the fair value, which shall be deemed a demand for payment of the amount of the deficiency. If the Dissenting Shareholder does not file his or her own estimate of the fair value within 30 days after such remittance or notice has been mailed by the Company, the Dissenting Shareholder will be entitled to no more than the amount estimated in the notice or remitted by the Company.

Within 60 days after the latest of (i) the effective time, (ii) timely receipt of any demands for payment or (iii) timely receipt of any Dissenting Shareholder estimates of fair value, if any demands for payment remain unsettled, the Company may file in court an application for relief requesting that the fair value of the Company common stock be determined by the court. Each Dissenting Shareholder whose demands have not been settled will be made a party to the proceeding and will be entitled to recover the amount by which the fair value of such Dissenting Shareholder’s common stock is found to exceed the amount, if any, previously remitted. Such Dissenting Shareholder will also be entitled to interest on such amount from the effective time until the date of payment. There is no assurance, however, that the Company will file such an application.

If the Company fails to file an application within the 60-day period, any Dissenting Shareholder who has not settled his or her claim may do so in the Company’s name within 30 days after the expiration of the 60-day period. If no Dissenting Shareholder files an application within such 30-day period, each Dissenting Shareholder who has not settled his or her claim will be paid no more than the Company’s estimate of the fair value of the Company common stock and may bring an action to recover any amount not previously remitted.

The costs and expenses of any valuation proceeding, including the reasonable compensation and expenses of any appraiser appointed by the court, will be determined by the court and assessed against the Company, except that any part of such costs and expenses may be assessed as the court deems appropriate against all or some of the Dissenting Shareholders whose action in demanding supplemental payment is found by the court to be dilatory, obdurate, arbitrary, vexatious or in bad faith. The court may also assess the fees and expenses of counsel and experts for any or all of the Dissenting Shareholders against the Company if it fails to comply substantially with Subchapter 15D or acts in a dilatory, obdurate, arbitrary or vexatious manner or in bad faith.

The court can also assess any such fees or expenses incurred by the Company against any Dissenting Shareholder if such Dissenting Shareholder is found to have acted in a dilatory, obdurate, arbitrary or vexatious manner or in bad faith. If the court finds that the services of counsel for any Dissenting Shareholder were of substantial benefit to the other Dissenting Shareholders and should not be assessed against the Company, it may award to such counsel reasonable fees to be paid out of the amounts awarded to the Dissenting Shareholders who were benefited.

Under the PBCL, a shareholder of the Company has no right to obtain, in the absence of fraud or fundamental unfairness, an injunction against the merger, nor any right to valuation and payment of the fair value of the holder’s shares because of the merger, except to the extent provided by the dissenters’ rights provisions of Subchapter 15D.

The PBCL also provides that absent fraud or fundamental unfairness, the rights and remedies provided by Subchapter 15D are exclusive.

The foregoing description of the rights of dissenters under Subchapter 15D should be read in conjunction with Annex C to this proxy statement, and is qualified in its entirety by reference to the provisions of Subchapter 15D.