CONTRIBUTION AGREEMENT DATED AS OF, 2008 AMONG SELLING COMPANY LLC SELLING COMPANY TOO LLC [NEWCO] SC ACQUISITION CO. AND SCT ACQUISITION CO.

Transcription

1 DRAFT CONTRIBUTION AGREEMENT DATED AS OF, 2008 AMONG SELLING COMPANY LLC SELLING COMPANY TOO LLC [NEWCO] SC ACQUISITION CO. AND SCT ACQUISITION CO.

2 CONTRIBUTION AGREEMENT This Contribution Agreement (this Agreement ) is dated as of, 2008, by and among [Newco], a Delaware corporation (the Holding Company ), SC Acquisition Co., a Delaware limited liability company ( SC Acquisition ), and SCT Acquisition Co., a Delaware limited liability company ( SCT Acquisition, and together with SC Acquisition, each a Transferee and collectively, the Transferees, and together with the Holding Company, each a Transferee Party and collectively, the Transferee Parties ), Selling Company, LLC, a New Jersey limited liability company ( SC ), and Selling Company Too, LLC, a New Jersey limited liability company ( SCT, and together with each SCT, each a Transferor and collectively, the Transferors ). and WHEREAS, the Transferees are wholly-owned subsidiaries of the Holding Company; WHEREAS, pursuant to the terms and conditions of this Agreement, SCT desires to contribute to SCT Acquisition, and SCT Acquisition desires to accept from SCT, the non-legal support business of SCT (the SCT Business ), and SC desires to contribute to SC Acquisition, and SC Acquisition desires to accept from SC, the title businesses of SC (the SC Business, and together with the the SCT Business, the Business ), for consideration that includes cash, the issuance of equity interests by the Holding Company and the assumption by the Transferees of certain liabilities as more fully described herein. NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants, agreements and conditions hereinafter set forth, and intending to be legally bound hereby, the parties hereto agree as follows: ARTICLE I CONTRIBUTION OF ASSETS Section Definitions. Certain capitalized terms used in this Agreement are defined in Appendix A attached hereto. Section Agreement to Contribute. Upon the terms and subject to the terms and conditions of this Agreement, at the Closing, but effective as of 12:01 a.m. on the Closing Date (the Effective Time ): (a) SCT shall contribute, convey, assign, transfer and deliver the SCT Assets to SCT Acquisition free and clear of any Encumbrances other than Permitted Encumbrances; (b) SC shall contribute, convey, assign, transfer and deliver the SC Assets to SC Acquisition free and clear of any Encumbrances other than Permitted Encumbrances; (c) the Transferees shall accept the contribution of the Contributed Assets and assume the Assumed Liabilities; and

3 (d) Transferors and the Transferee Parties shall take such other actions that this Agreement requires each such party to take. Section The Contributed Assets. The term Contributed Assets shall mean and include (i) substantially all of the assets of SCT as more completely set forth in SCHEDULE 1.03 under the heading SCT Assets and those assets acquired by SCT from the date hereof through the Closing Date in accordance with terms of this Agreement (the SCT Assets ); and (ii) substantially all of the assets of SC as more completely set forth in SCHEDULE 1.03 under the heading SC Assets and those assets acquired by SC from the date hereof through the Closing Date in accordance with terms of this Agreement (the SC Assets, and together with the SCT Assets, the Contributed Assets ). Included in the Contributed Assets will be Two Million Dollars ($2,000,000.00) in cash, allocated among the SCT Assets and the SC Assets as set forth on SCHEDULE After the Closing, SCT and SC shall not have any assets other than the Excluded Assets. Section Excluded Assets. Notwithstanding anything to the contrary contained in Section 1.03 hereof, or elsewhere in this Agreement, the following assets of Transferors (collectively, the Excluded Assets ) are not part of the contribution contemplated hereunder, are excluded from the Contributed Assets and shall remain the property of Transferors after the Closing: (i) all minute books, stock records and corporate seals; (ii) deposits, prepaid expenses, costs advanced and claims for refunds and right to offset (including but not limited to prepaid newspaper advertisements, title fees and filing fees) paid by Transferor prior to the Closing Date that will be invoiced to or paid by the clients of Transferor after the Closing Date; (iii) all insurance policies and rights thereunder except as set forth herein; (v) all personnel records and other records that Transferors are required by law to retain in its possession; (iv) all rights of Transferors under this Agreement and the Ancillary Agreements; and (v) with respect to Transferor, all assets not primarily related to the Business; (vi) the Accounts Receivable; and (vii) the items described in SCHEDULE If any provision of any agreement included as part of the Contributed Assets would prohibit any attempted assignment of any asset or interest thereunder or impose a charge, discount or penalty upon an assignment without the consent of the other party to such agreement, even though such assignment would not become effective until such consent was obtained, then nothing in this Agreement shall be deemed an assignment of any such interest or agreement and the interest shall not be a Contributed Asset hereunder unless and until such consent is obtained. Without in any way limiting Transferee s obligation to obtain all consents and waivers necessary for the sale, transfer, assignment and delivery of such assets or interests to Transferee hereunder, if any such consent is not obtained or if such assignment is not permitted irrespective of consent and the Closing hereunder is consummated, Transferors shall cooperate with the Transferees following the Closing Date in any reasonable arrangement designed to provide the Transferees with the rights and benefits (subject to the obligations) under any such asset or interest, including enforcement for the benefit of a Transferee of any and all rights of a Transferor against any other party and, if requested by a Transferee, acting as an agent on behalf of such Transferee or as such Transferee shall otherwise reasonably require. Transferee shall bear the costs and expenses incurred in connection with the foregoing. Section The Assumed Liabilities. The term Assumed Liabilities shall mean and include any liabilities and obligations (i) related to the ownership and operation of the Business 2 Appendix A

4 and Contributed Assets arising on or after the Closing Date, and (ii) arising on or after the Closing Date under those other specific contracts, leases, agreements, obligations and liabilities listed under the heading Assumed Liabilities on SCHEDULE 1.05 of the Disclosure Schedules. All liabilities and obligations of the Business and Transferors that are not Assumed Liabilities (whether known or unknown, actual or contingent and, including for the purpose of clarity, all pre-closing Taxes) (the Excluded Liabilities ) shall be retained by Transferors and no Transferee Party shall have any responsibility for any such liability or obligation. Section Consideration. (a) The consideration to be paid to SCT by SCT Acquisition for the SCT Assets will be (i) Thirty Million Dollars ($30,000,000) (the SCT Cash Consideration ), and (ii) the assumption of the Assumed Liabilities relating to the SCT Assets (the SCT Rollover Equity ) (collectively, (i) and (ii), the SCT Consideration ). The cash portion of the SCT Consideration shall be delivered on the Closing Date by wire transfer of immediately available funds to the account(s) designated by SCT to the Holding Company in writing at least one (1) Business Day prior to the Closing. (b) The consideration to be paid to SC by SC Acquisition for the SC Assets will be (i) Seventy Million Dollars ($70,000,000) (the SC Cash Consideration, and together with the SCT Cash Consideration, the Cash Consideration ), and (ii) the assumption of the Assumed Liabilities relating to the SC Assets (the SC Rollover Equity, and collectively with the SCT Rollover Equity, the Rollover Equity ) (collectively, (i) and (ii), the SC Consideration, and together with the SCT Consideration, the Consideration ). The cash portion of the SC Consideration shall be delivered on the Closing Date by wire transfer of immediately available funds to the account(s) designated by SC to the Holding Company in writing at least one (1) Business Day prior to the Closing. (c) The parties acknowledge and agree that immediately upon Closing the Rollover Equity shall be deemed transferred by each Transferor to its partners, members or stockholders as applicable (each, a Rollover Equity Holder ) as set forth on SCHEDULE 1.06(e) hereto. (d) Escrow. On the Closing Date, an aggregate of Ten Million Dollars ($10,000,000) (the Escrow Amount ), in individual amounts as set forth, on Schedule 1.06(f) shall be placed into four interest-bearing escrow accounts (each account, an Escrow Account and collectively, the Escrow Accounts ) to be held in escrow for twelve (12) months after the Closing Date. Upon the Closing, Escrow Amount shall be retained in the Escrow Accounts and pursuant to the terms and subject to the conditions of the Escrow Agreement in order to secure the indemnification obligations of Transferors pursuant to Article VI. The Escrow Amount plus any interest accrued thereon (in aggregate, the Escrow Funds ) shall be paid to Transferors or Transferees subject to the terms of the Escrow Agreement. Notwithstanding the foregoing, on and as of the date that is twelve (12) months following the Closing Date, Transferors and Transferees shall direct the release to Transferors (or their designee) from the Escrow Amount an amount equal to (i) the Escrow Funds (including all interest earned thereon) less (ii) the amount of any reasonable claims by the Transferee Parties for indemnification pursuant to and subject to the provisions of Article VI outstanding and unpaid as of such date, if any, pursuant to the terms and subject to the conditions set forth in this Agreement and the Escrow Agreement. All escrow 3 Appendix A

5 fees charged by the escrow agent or arising out of the Closing shall be paid one-half (1/2) by Transferors and one-half (1/2) by the Transferee Parties. Section Closing. The transactions provided for in this Agreement (the Closing ) will take place at the offices of Hunton & Williams LLP at Bank of America Plaza, Suite 4100, 600 Peachtree Street, Atlanta, Georgia (or such other place as the parties may agree to in writing) commencing at 10:00 a.m. (local time) on or about, 2008 (the Closing Date ). Section Deliveries at Closing. (a) At the Closing, subject to written waiver by the Transferees, Transferors shall deliver to the Transferee Parties physical possession of all tangible Contributed Assets and shall execute, as appropriate, and deliver the following: (i) Bills of Sale substantially in the form set forth as EXHIBIT B (each a Bill of Sale and collectively, the Bills of Sale ), and such other good and sufficient instruments of conveyance, transfer and assignment (in form and substance reasonably acceptable to the applicable Transferee) as shall be necessary to vest in the applicable Transferee good and valid title to the Contributed Assets being contributed by the respective Transferors, free and clear of all Encumbrances except Permitted Encumbrances; (ii) Assignment and Assumption Agreements substantially in the form set forth as EXHIBIT C (each an Assignment and Assumption Agreement and collectively, the Assignment and Assumption Agreements ) assigning to the applicable Transferee the Contracts being assigned by the respective Transferors as of the Closing; (iii) a Shareholders Agreement of the Holding Company substantially in the form set forth on EXHIBIT D (the Shareholders Agreement ), executed by the Rollover Equity Holders; (iv) [Intentionally Omitted] (v) Non-Competition Agreements between the Holding Company and each of the individuals set forth on SCHEDULE 1.08(a)(v) substantially in the form set forth on EXHIBIT F (the Noncompete Agreement ); (vi) Employment Agreements between the Holding Company and each of the individuals set forth on SCHEDULE 1.08(a)(vi) substantially in the form set forth on EXHIBIT G (each an Employment Agreement and collectively, the Employment Agreements ); (vii) a certificate of an authorized officer of each Transferor substantially in the form set forth as EXHIBIT H; (viii) a certification that each Transferor is in compliance with Code Section 1445 and the Treasury Regulations that such Transferor is not a foreign person; 4 Appendix A