EXHIBIT 10.1
CONTRIBUTION AGREEMENT
----------------------
This Contribution Agreement (the "Agreement") made as of the 4th day of
November, 2005 ("Agreement Date"), by and between ____________, ______
_____________, _____ ______, ______ ______, and ______ ______ (collectively the
"Contributors") and ________________________________________, a Delaware limited
partnership ("Partnership").
RECITALS
1. Contributors are collectively the owners of _____ shares (the
"Shares") in ________________________, a Connecticut corporation, (the
"Company"), each in the amount indicated on Schedule I attached hereto;
2. Contributors desire to contribute to Partnership the Shares in
return for limited partnership interests or units, as limited partners, on a pro
rata basis each in the amount indicated on Schedule I, in the Partnership
("Units");
3. In addition to the Units, Contributors will also receive Promissory
Notes, on a pro rata basis, the form of which is indicated on Schedule II
(collectively the "Notes").
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
A. Definitions.
a. "Affiliate" when used with reference to a specified Person,
any Person who directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common
control with the specified Person.
b. "Agreement" has the meaning set forth in the initial paragraph
hereof.
c. "Agreement Date" has the meaning set forth in the initial
paragraph hereof.
d. "Assignment" has the same meaning set forth in Paragraph N.
e. "Broker" has the meaning set forth in Paragraph I.
f. "Closing" has the meaning set forth in Paragraph F.
g. "Code" means the Internal Revenue Code of 1986, as amended.
1
h. "Contributors" has the meaning set forth in the initial
paragraph hereof.
i. "Contributors' Documents" has the meaning set forth in
Paragraph F.
j. "ERISA" has the meaning set forth in Paragraph G.
k. "Notes" has the meaning set forth on Schedule II.
l. "Partnership" has the meaning set forth in the initial
paragraph hereof.
m. "Person" means any natural person, corporation, partnership,
trust or other entity.
n. "Shares" has the meaning set forth in Schedule I.
o. "Securities Act" has the meaning set forth in Paragraph G.
p. "Survival Period" has the meaning set forth in Paragraph H.
q. "Units" has the meaning set forth in Schedule I.
r. "Value" has the meaning set forth in Paragraph C.
B. Contribution of Shares. Contributors shall contribute or cause to be
contributed to Partnership the Shares, in accordance with the terms and
conditions set forth herein, in exchange for Units and Notes, and Partnership
shall accept the Shares.
C. Agreed Value. In consideration of the contribution to Partnership of
the Shares by Contributors, at the Closing Contributors shall receive (i) such
number of Units calculated in the manner set forth on Schedule I as set forth
opposite his or her name on Schedule I; and (ii) such principal amount of Notes
as set forth opposite his or her name on Schedule II.
D. Conditions to Closing. Partnership's obligation under this Agreement
to accept the Shares and provide Contributors with Units and Notes is subject to
the satisfaction or waiver of the following conditions on, before, or
immediately after the Closing.
a. Accuracy of Representations and Warranties. The
representations and warranties of Contributors contained in
this Agreement and Contributors' Documents shall be true and
correct in all material respects on the date of Closing with
the same effect as though made on the Closing Date.
2
b. Consents. All consents required to permit the consummation by
Contributor of the transaction contemplated by this Agreement
shall have been obtained.
c. Performance of Agreement. Contributors shall have performed,
in all material respects, all of their respective covenants,
agreements and obligations hereunder and under Contributors'
Documents.
In the event that for any reason any of the conditions set forth in
this Paragraph D or elsewhere in this Agreement are not satisfied or waived by
Partnership at or prior to or immediately following the Closing, at
Partnership's option this Agreement shall be terminated and Partnership and
Contributors shall be released from their obligations under this Agreement and
neither Partnership nor Contributors shall have any further liability hereunder.
Subject to the provisions of Paragraph G hereof, the consummation of the
transaction contemplated hereby shall be deemed a waiver by Partnership of all
conditions set forth in this Paragraph D or elsewhere in this Agreement which
have not theretofore been satisfied or waived by Partnership.
E. Transaction Costs. Except as otherwise specifically set forth
herein, all costs and expenses with respect to the transaction contemplated
hereby shall be borne by Partnership unless the transaction is not consummated
for any reason, in which event such costs and expenses shall be borne by
Contributors.
F. Closing.
a. Time and Place; Contributors Requirements. The transaction
contemplated by this Agreement shall be consummated on
November __, 2005 at a time and place mutually agreed upon by
Partnership and Contributors ("Closing"). Partnership's
obligation to close this transaction is subject to delivery to
Partnership of each of the following, all in form and
substance reasonably satisfactory to Partnership immediately
prior to or after the Closing:
(i) The execution and delivery to Partnership by
Contributors of, and the performance by Contributors
of their agreements under this Agreement and the
documents executed and delivered by it at Closing
(the "Contributors' Documents") and the contribution
of the Shares to Partnership by Contributors are
within the power of Contributors and;
3
(ii) This Agreement and the Contributors' Documents have
been duly executed and delivered by Contributors;
(iii) This Agreement and the Contributors' Documents are
enforceable against Contributors; and
b. Partnership Requirements. At the Closing, Partnership shall
deliver to Contributors the number of Units and Notes
described in Paragraph C and shall execute and deliver those
Closing documents required to be executed by it in accordance
with Paragraph F or as may be otherwise necessary or
appropriate to consummate the transaction contemplated hereby.
G. Representations and Warranties. Contributors make the following
representations and warranties to Partnership, all of which (a) are made only to
the best knowledge of the Contributors, (b) are true and correct in all material
respects on the Agreement Date and (c) shall be true and correct in all material
respects as of the Closing:
a. The Contributors acknowledge that they have been advised and
understand that: the Units have not been and will not be
registered under the Securities Act of 1933 (the "Securities
Act"); each Contributor must bear the economic risk of the
Units to be received by him or her for an indefinite period of
time because the Units have not been registered under the
Securities Act and, therefore, cannot be sold unless they are
subsequently registered under the Securities Act or an
exemption from such registration is available; and the Units
are subject to the restrictions on transfer set forth in the
Partnership Agreement.
b. The Units to be received by the Contributors hereunder shall
be held by the Contributors for investment purposes only, for
4
his or her own account or for his or her account as trustee of
an employee benefit plan within the meaning of ERISA
("Employee Retiree Income Security Act"), and the Contributors
have no present intention of selling, granting a participation
in, or otherwise distributing the same, other than in a
transaction that is exempt from registration under federal and
state securities laws, including upon death of the
Contributors in a transaction that is exempt from registration
under federal and state securities laws.
c. The Contributors will not offer, sell, transfer or assign
their Units, Notes, or any interest therein in contravention
of the Partnership's partnership agreement or the Securities
Act or any state or federal law.
d. The Contributors have no contract, understanding, agreement or
arrangement with any person or entity to sell, transfer (other
than in a transaction that is exempt from registration under
federal and state securities laws) or grant a participation to
such person or entity or any other person or entity, with
respect to any or all of the Units and/or Notes they will
receive in accordance with the provisions hereof.
e. The Contributors understand that the Units are not being
registered under the Securities Act but are being issued in
reliance upon an exemption which is in part predicated on the
representations, warranties and agreements made by the
Contributors in this Agreement.
f. Each of the Contributors are "accredited investors" within the
meaning of Regulation D under the Securities Act and have
knowledge and experience in financial and business matters
such that they are capable of evaluating the merits and risks
of receiving and owning the Units and Notes and the
Contributors are able to bear the economic risk of such
ownership.
g. Each of the Contributors either (i) have a preexisting
personal or business relationship with Partnership or one or
more of its partners, officers, directors or controlling
persons, consisting of personal or business contacts of a
nature and duration such as has enabled Contributors to be
aware of the character, business acumen and general business
and financial circumstances of the person with whom such
relationship exists, or (ii) by reason of Contributors'
business or financial experience have the capacity to protect
their own interests in connection with the transaction.
5
h. Contributors are able to bear the economic risk of
Contributors' investment in the transaction.
i. Contributors understand the risks of, and other considerations
relating to, the acquisition of the Units and Notes.
j. Contributors have been provided an opportunity to ask
questions of, and have received answers from, the Partnership
and their representatives regarding the offering of the Units
and Notes, and have obtained all additional information
requested by the Contributors of the Partnership and their
representatives to verify the accuracy of all information
furnished to the Contributors.
H.Survival of Representations and Warranties; Limitation of Liability.
a. Survival. All representations and warranties in this Agreement
are made to the Contributors' best knowledge, and shall
survive the Closing to the end of the period expiring two
years after the date of Closing, except for the
representations and warranties contained in Paragraph G which
shall survive until the termination of the statutory
limitation period, including available extensions or tolling
periods, (the "Survival Period"), at which time such
representations and warranties shall terminate and be of no
further force and effect; provided, however, that any specific
claim set forth in any written notice with respect to a breach
of representation or warranty delivered to Contributors prior
to the expiration of the Survival Period shall survive the
expiration of the Survival Period.
b. Indemnification. The Contributors shall defend, indemnify and
hold the Partnership harmless from and against any and all
losses, claims, liabilities, judgments and other matters,
including but not limited to, reasonable attorneys fees (the
"Losses") arising out of or incurred in connection with, a
breach of any representation, warranty or covenant of
Contributor under this Agreement. In the event that the
Partnership incurs Losses, to the extent that the Contributors
are finally determined, by agreement between the Contributors
6
and the Partnership or by a court of competent jurisdiction
after all appeal periods have run, to be required to indemnify
the Partnership for such Losses as provided herein, then the
liability of the Contributors for such Losses of the
Contributors shall be limited as provided in and satisfied in
accordance with the agreement of limited partnership of the
Partnership.
I. Brokers. Each party represents and warrants to the other that it has
dealt with no broker, finder or other person (collectively, "Broker") with
respect to this Agreement or the transactions contemplated hereby and that no
Broker is entitled to a commission as a result of this transaction. Partnership
and Contributors each agree to indemnify and hold harmless each other against
any loss, liability, damage, expense or claim incurred by reason of any
brokerage commission or finder's fee alleged to be payable because of any act,
omission or statement of the indemnifying party. Such indemnity obligation shall
be deemed to include the payment of reasonable attorney's fees and court costs
incurred in defending any such claim.
J. Complete Agreement. This Agreement represents the entire agreement
between Contributors and Partnership covering everything agreed upon or
understood in this transaction. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution hereof or in effect between the
parties. No change or addition shall be made to this Agreement except by a
written agreement executed by Contributors and Partnership.
K. Authorized Signatories. The persons executing this Agreement for and
on behalf of Partnership and Contributors each represent that they have the
requisite authority to bind the entities on whose behalf they are signing.
L. Partial Invalidity. If any term, covenant or condition of this
Agreement is held to be invalid or unenforceable in any respect, such invalidity
or unenforceability shall not affect any other provision hereof, and this
Agreement shall be construed as if such invalid or unenforceable provision had
never been contained herein.
7
M. Notices. All notices and other communications required or permitted
to be given hereunder shall be in writing and shall be given by personal
delivery, by United States registered or certified mail (postage prepaid, return
receipt requested) addressed as hereinafter provided or via telephonic facsimile
transmission. Notice shall be sent and deemed given when (a) if personally
delivered, then upon receipt by the receiving party, or (b) if mailed, then
three (3) days after being postmarked, or (c) if sent via telephonic facsimile
transmission, then upon receipt by a designated facsimile receiving device in
the office of the receiving party. All notices to or from any party or entity
having privity of contract or estate with the Company or to or from any
Federal, State or local authority delivered or received in connection with the
Company, not of a routine nature, shall be sent to Partnership as soon as is
practicable after delivery but not more than five (5) business days following
receipt by Contributor.
Any party listed below may change its address hereunder by notice to
the other party listed below. Until further notice, notice and other
communications hereunder shall be addressed to the parties listed below as
follows:
If to Contributors: -------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
If to Partnership: -------------------
-------------------
-------------------
-------------------
8
N. Assignment. Partnership shall have the right to assign this
Agreement to any entity controlling, controlled by or under common control with
Partnership, without the consent of Contributor.
O. Miscellaneous.
a. This Agreement shall be interpreted and enforced according to
the laws of the State of Delaware without regard to the
principles of conflicts of law.
b. All headings and sections of this Agreement are inserted for
convenience only and do not form part of this Agreement or
limit, expand or otherwise alter the meaning of any provisions
hereof.
c. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of
which shall constitute one and the same agreement. Facsimile
signatures shall be deemed effective execution of this
Agreement and may be relied upon as such by the other party.
In the event facsimile signatures are delivered, originals of
such signatures shall be delivered to the other party within
three (3) business days after execution.
d. The rights and obligations of Contributor and Partnership
herein contained shall inure to the benefit of and be binding
upon the parties hereto and their respective personal
representatives, heirs, successors and assigns.
e. The provisions of this Agreement are intended to be for the
sole benefit of the parties hereto and their respective
successors and assigns, and none of the provisions of this
Agreement are intended to be, nor shall they be construed to
be, for the benefit of any third party.
9
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day first written above.
CONTRIBUTORS:
--------------------------------
----------------------
--------------------------------
----------------------
--------------------------------
----------------------
--------------------------------
----------------------
--------------------------------
----------------------
PARTNERSHIP:
--------------------------------
----------------------
BY: ---------------------------
----------------------
--------------------------------
By: ----------------------
Its: ----------------------
10
SCHEDULE I
------------------------------------------------------------------------------------------------------------
Contributors Number of Shares ("Shares") in Eternal Number of Units ("Units") of ________
Enterprise, Inc. contributed to _____________________________________
_______________________________ exchanged for Shares of _____________
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Total
------------------------------------------------------------------------------------------------------------
11
SCHEDULE II
FORM OF PROMISSORY NOTE
PROMISSORY NOTE
---------------
$_________________ November __, 2005
FOR VALUE RECEIVED ___________ (the "Borrower"), promises to pay to the
order of _______, an individual, with an address at
_______________________________________________________________________
(the "Lender"), the principal sum of $_________, together with interest
computed from the date hereof at the prime rate in effect at Citibank N.A.
on the date hereof, until paid in full, at the times and installments set
forth below.
The entire balance of principal and interest hereunder shall be due and
payable on November __, 2010.
This Note is issued in accordance with the terms and conditions set
forth in the Contribution Agreement, of even date herewith, by and between the
Borrower and the Lender (the "Contribution Agreement").
Notwithstanding any provision contained herein or in the Stock Purchase
Agreement, the total liability of Borrower for payment of interest pursuant
hereto, including late charges, shall not exceed the maximum amount of such
interest permitted by law to be charged, collected, or received from
Borrower, and if any payments by Borrower include interest in excess of
such a maximum amount, Lender shall apply such excess to the reduction of
the unpaid principal amount due pursuant hereto, or if none is due, such
excess shall be refunded to Borrower.
Upon the maturity hereof, by acceleration or otherwise, and/or after
judgment, interest shall be payable at the rate of ____% percent per annum
or at the judgment rate, whichever is higher, until the obligation is paid
in full. In addition, all costs and expenses incurred by the holder hereof,
including, but not limited to, reasonable attorneys' fees and
disbursements, as a result of a default hereunder, shall be added to the
principal amount due hereunder.
12
Any interest not paid when due hereunder shall be added to the
principal amount of this Note and shall bear interest from its due date at the
applicable interest rate specified above.
The Borrower shall have the right to prepay all or any portion of the
principal of this Note with interest to the date of such prepayment. All
payments shall be applied first toward the payment of interest and the
balance towards the reduction of principal.
The Borrower shall pay all of Lender's reasonable expenses incurred to
enforce or collect any of the amounts due under this Note including, without
limitation, reasonable arbitration, paralegals', attorneys' and experts' fees
and expenses, whether incurred without the commencement of a suit, in any trial,
arbitration, or administrative proceeding, or in any appellate or bankruptcy
proceeding.
The Borrower and all endorsers, sureties, and guarantors hereof,
jointly and severally waive presentment, demand for payment, notice of dishonor,
notice of protest and protest, and all other notices or demands in connection
with the delivery, acceptance, performance, default, indorsement or guaranty of
this instrument.
This Note shall be construed and enforced in accordance with the laws
of the State of New York. The undersigned hereby consents to the in personam
jurisdiction of the courts of the State of New York. Wherever possible each
provision of this Note shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Note shall be
prohibited by or invalid under applicable law, such provisions shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Note.
By: _____________________________
_________________
13