Exhibit 10.1


 


EXECUTION COPY


 


SHARE EXCHANGE AGREEMENT


 


This SHARE EXCHANGE AGREEMENT dated as of August 30,
2010 (this “Agreement”) by and between Tree.com, Inc., a Delaware
corporation (the “Company”), and Douglas R. Lebda (the “Purchaser”).


 


BACKGROUND


 


As of the date hereof, Purchaser owns and holds
5,000 shares of Series A Redeemable Preferred Stock (the “Preferred
Stock”), par value $0.01 per share, of LendingTree Holdings Corp., a
Delaware corporation and wholly-owned subsidiary of the Company (the “Subsidiary”),
being all of the issued and outstanding shares of Preferred Stock.  The Preferred Stock has the designations,
relative rights, preferences and limitations set forth in the Subsidiary’s
Amended and Restated Certificate of Incorporation (“Certificate of
Incorporation”) filed with the Secretary of State of the State of
Delaware.  No dividends have been
declared or paid in respect of the Preferred Stock as of the date hereof.


 


The Company and Purchaser desire to exchange newly
issued shares of common stock, par value $0.01  per
share, of the Company (the “Common Stock”), for certain shares of the
Preferred Stock, together with the Accrued Dividends (as defined in the
Certificate of Incorporation) in respect of the such shares, on the terms set
forth herein (the “Exchange”).


 


In consideration of the mutual covenants and
agreements contained in this Agreement, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound, the parties hereby
agree as follows:


 


ARTICLE I


 


SHARE EXCHANGE


 


Section 1.1                                      Definitions.  As used in this Agreement, the following
capitalized terms shall have the following meanings:


 


(a)                                  “Vested
Preferred Shares” means 3,333 shares of Preferred Stock that have vested
pursuant to the terms of the Restricted Share Grant and Stockholder’s Agreement
dated as of August 15, 2008 by and among the Company (as successor by
assignment to IAC/InterActiveCorp), the Subsidiary and Purchaser, as amended
(the “Preferred Stock Agreement”).


 


(b)                                 “Exchange
Preferred Shares” means 2,902.33 shares of Preferred Stock held by the
Purchaser, which represent the Vested Preferred Shares for which the aggregate
liquidation preference of $2,902,563 and the Accrued Dividends (as defined in
the Certificate of Incorporation) in respect thereof of $1,055,932 as of the
date hereof equals the Exchange Common Share Value.


 


(c)                                  “Exchange
Common Shares” means 534,900 shares of Common Stock, which represent (i) the
number of whole shares of Common Stock the issuance of which would result in an
increase in the issued and outstanding Common Stock or voting power of the
Company as of the date hereof equal to 5% (with any resulting fraction of a
share being rounded down to the nearest whole share) minus (ii) 43.


 

















 


(d)                                 “Exchange
Common Share Value” means the product of the Exchange Common Shares and the
Common Stock Value.


 


(e)                                  “Common
Stock Value” means $7.40, which represents the closing price on the Nasdaq
Global Market on the trading day preceding the Closing, and is the greatest of (i) the
Common Stock VWAP over the 5 consecutive trading days ending on and including
the trading day preceding the Closing, (ii) the Common Stock VWAP over the
10 consecutive trading days ending on an including the trading day preceding to
the Closing, or (iii) the closing price on the Nasdaq Global Market on the
trading day preceding the Closing.


 


(f)                                    “Common
Stock VWAP” means the simple arithmetic average of the daily per share
volume-weighted average price of the Common Stock on the Nasdaq Global
Market.  The per share volume-weighted
average price of the Common Stock for a given trading day, shall be determined
by calculating, for each trade on such day, the product of the price per share
multiplied by the number of shares for such trade, and by adding all such
products and dividing such sum by the total number of shares traded on such
day.


 


Section 1.2                                      Exchange.  At the Closing, pursuant to the Exchange, the
Purchaser agrees to transfer to the Company the Exchange Preferred Shares
together with the Accrued Dividends (as defined in the Certificate of
Incorporation) in respect thereof as of the Closing of $1,055,932, in exchange
for which the Company agrees to issue to Purchaser the Exchange Common Shares.


 


No fractional share of
Common Stock will be issued in the Exchange.


 


Section 1.3                                      Share Exchange
Documentation and Closing.


 


(a)                                  The closing of the Exchange will occur concurrently with the execution of
this Agreement on August 30, 2010 (the “Closing”) at the offices
of the Company at 11115 Rushmore Drive, Charlotte, North Carolina 28277.


 


(b)                                 At the Closing, the Company will deliver to Purchaser a certificate
representing the Exchange Common Shares issued in the Exchange and the
Purchaser will deliver to the Company a certificate representing the Exchange
Preferred Shares.  For the avoidance of
doubt, Purchaser shall cease to own the Exchange Preferred Shares as of the
Closing.


 


ARTICLE II


 


REPRESENTATIONS AND
WARRANTIES OF THE COMPANY


 


The Company represents and warrants to, and agrees
with Purchaser, as of the date hereof (which representations and warranties
shall also be true and correct as of the Closing if the Closing does not occur
concurrently with the execution of this Agreement), as follows:


 


Section 2.1                                      Organization.  The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.


 


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Section 2.2                                      Valid Issuance
of Exchange Common Shares.  The
Exchange Common Shares will be duly authorized, validly issued, fully paid and
non-assessable and free and clear of all liens and encumbrances other than
restrictions on transfer imposed by applicable securities laws.


 


Section 2.3                                      Authority.  The Company has all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby.  This Agreement has
been duly executed and delivered by the Company, and constitutes the valid and
binding obligation of the Company, enforceable in accordance with its terms, except
to the extent that enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting the enforcement
of creditors’ rights generally and by general principles of equity.


 


ARTICLE III


 


REPRESENTATIONS AND
WARRANTIES OF PURCHASER


 


Purchaser represents and warrants to, and agrees
with, the Company, as of the date hereof (which representations and warranties
shall also be true and correct as of the Closing if the Closing does not occur
concurrently with the execution of this Agreement), as follows:


 


Section 3.1                                      Authority.  Purchaser has all requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby.  This Agreement has
been duly executed and delivered by Purchaser, and constitutes the valid and
binding obligation of Purchaser, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting the
enforcement of creditors’ rights generally and by general principles of equity.


 


Section 3.2                                      Purchase Entirely for Own Account.  The Exchange Common Shares are being acquired
by Purchaser for investment for Purchaser’s own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and Purchaser has no present intention of selling, granting any participation
in, or otherwise distributing the same.  Purchaser further represents that
he does not presently have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant any participation with respect to
any of the Exchange Common Shares.


 


Section 3.3                                      No Commissions. No commission, fee or
other remuneration is to be paid or given, directly or indirectly, to any
person or entity for soliciting Purchaser to purchase the Exchange Common
Shares.


 


Section 3.4                                      Investment Experience and Access to Information.  Purchaser is an “accredited investor” as defined in
Rule 501(a) under the Securities Act of 1933, as amended (the “Securities
Act”).  Purchaser is aware of the Company’s business affairs and
financial condition and has had full access to and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision
to acquire the Exchange Common Shares.  Purchaser has such business and
financial experience as is required to give him the ability to protect his own
interests in connection with the purchase of the Exchange Common Shares.  Purchaser has 


 


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had an opportunity to ask questions and receive
answers concerning the terms and conditions of the offering of Exchange Common Shares.


 


Section 3.5                                      Ability to Bear Risk.
Purchaser is able to bear the economic risk of his investment in the Exchange
Common Shares for an indefinite period of time and Purchaser understands that
the Exchange Common Shares have not been registered under the Securities Act
and cannot be sold unless subsequently registered under the Securities Act or
an exemption from such registration is available. Purchaser acknowledges that
he could bear a complete or significant loss of his investment in the Exchange
Common Shares.  Purchaser
understands that his investment in the Exchange Common Shares involves a
significant degree of risk including a risk of total loss of its investment,
and he is fully aware of and understands all the risk factors related to the
Exchange and the issuance of the Exchange Common Shares.  Purchaser has consulted his own tax advisor
as to the personal tax consequences of the Exchange.


 


Section 3.6                                      Restricted
Securities.


 


(a)                                  Purchaser
understands that the Exchange Common
Shares are “restricted” under applicable U.S. federal and state
securities laws inasmuch as it is being acquired from the Company in a
transaction not involving a public offering and that, pursuant to these laws
and applicable regulations, Purchaser must hold the Exchange Common Shares
indefinitely unless it is registered with the Securities and Exchange
Commission (the “SEC”), and qualified by state authorities, or an
exemption from such registration and qualification requirements is available.


 


Purchaser further acknowledges that if an exemption
from registration or qualification is available, it may be conditioned on
various requirements including the timing and manner of sale, the holding
period for the Exchange Common Shares, and on requirements relating to the
Company which are outside of Purchaser’s control, and which the Company is under
no obligation and may not be able to satisfy.  In this connection,
Purchaser represents that he is familiar with Rule 144 promulgated under
the Securities Act, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.


 


Section 3.7                                      Legends. 
Purchaser understands that the Exchange Common Shares, and any securities
issued in respect thereof or exchange therefor, may bear the following legends:


 


(a)                                  THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR
IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  THESE SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE
STATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.”


 


(b)                                 Any legend
required by the Blue Sky laws of any state to the extent such laws are
applicable to the shares represented by the certificate so legended.


 


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Section 3.8                                      Disclosure.  Purchaser has disclosed to the Company all
information material and relevant to the determination by the Company and its
Board of Directors to enter into the transaction contemplated hereby.


 


Section 3.9                                      No Encumbrances.  Purchaser is the sole and exclusive holder
and beneficial owner of the Exchange Preferred Shares free and clear of all
liens, pledges, hypothecations, claims or encumbrances, and no other person,
firm or corporation has any interest whatsoever in the Exchange Preferred
Shares.


 


Section 3.10                                Reliance.  Purchaser acknowledges that the Company will
rely upon the truth and accuracy of the foregoing acknowledgements, representations
and agreements.


 


ARTICLE IV


 


MISCELLANEOUS


 


Section 4.1                                      Notices.  All notices and other communications required
or permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if delivered personally or by facsimile or three
business days after having been sent by certified mail, return receipt
requested, postage prepaid, to the parties to this Agreement at the following
address or to such other address either party to this Agreement shall specify
by notice to the other party:


 


(i)                                     If to the Company:


Tree.com, Inc.


11115 Rushmore Drive


Charlotte, NC 28277


Attention:    Debra
Ashley, Vice President & Assistant General Counsel


Facsimile:    (949)
255-5131


 


(ii)                                  If to Purchaser:


Douglas
R. Lebda


c/o
Tree.com, Inc.


11115 Rushmore Drive


Charlotte, NC 28277


Facsimile:    (949)
255-5155


 


Section 4.2                                      Further
Assurances.  Each party
hereto shall do and perform or cause to be done and performed all further acts
and shall execute and deliver all other agreements, certificates, instruments
and documents as the other party hereto reasonably may request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transaction contemplated hereby and thereby.


 


Section 4.3                                      Amendments and
Waivers.


 


(a)                                    Any provision
of this Agreement may be amended or waived if, but only if, such amendment or
waiver is in writing and is duly executed and delivered by the Company and
Purchaser.


 


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(b)                                   No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.


 


Section 4.4                                      Successors and
Assigns.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that neither party may
assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement without the prior written consent of the non-assigning party hereto.


 


Section 4.5                                      Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.


 


Section 4.6                                      Entire
Agreement.  This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter of this Agreement and supersedes all prior agreements and
understandings, both oral and written, between the parties and/or their
affiliates with respect to the subject matter of this Agreement.


 


Section 4.7                                      Effect of
Headings.  The Article and
Section headings herein are for convenience only and shall not affect the
construction hereof.


 


Section 4.8                                      Severability.  If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be deemed
to be excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforced in
accordance with its terms to the maximum extent permitted by law.


 


Section 4.9                                      Public
Announcements.  Subject to
each party’s disclosure obligations imposed by law, each of the parties hereto
agree that the terms of this Agreement shall not be disclosed or otherwise made
available to the public and that copies of this Agreement shall not be publicly
filed or otherwise made available to the public.


 


Section 4.10                                Counterparts;
Third Party Beneficiaries.  This
Agreement may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures were upon the same
instrument.  No provision of this
Agreement shall confer upon any person other than the parties hereto any rights
or remedies hereunder.


 


Section 4.11                                Waiver of Jury
Trial.  Each of the parties to this
Agreement hereby waives, to the fullest extent permitted by law, any right to
trial by jury of any claim, demand, action, or cause of action (i) arising
under this Agreement or (ii) in any way connected with or related or
incidental to the dealings of the parties hereto in respect of this Agreement
or any of the transactions related hereto, in each case whether now existing or
hereafter arising, and whether in contract, tort, equity, or otherwise.  Each of the parties to this Agreement hereby
agrees and consents that any such claim, demand, action, or cause of action
shall be decided by court trial without a jury and that the parties to this
Agreement may file an original counterpart of a copy of this Agreement with any



 


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court as written evidence of the consent of the
parties hereto to the waiver of their right to trial by jury.


 


Section 4.12                                Remedies.  Each of the parties to this Agreement will be
entitled to enforce its rights under this Agreement specifically, to recover
damages and costs (including reasonable attorneys’ fees) caused by any breach
of any provision of this Agreement and to exercise all other rights existing in
its favor.  The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may, in its sole
discretion, apply to any court of law or equity of competent jurisdiction
(without posting any bond or deposit) for specific performance and/or
injunctive or other relief in order to enforce or prevent any violations of the
provisions of this Agreement.


 


Section 4.13                                Regulatory
Filings; Expenses.  Each party
shall be responsible for making their respective filings or disclosures with
any state or federal agency.  In
addition, each party shall bear its own expenses in connection with the
negotiation and preparation of this Agreement and its consummation of the
transactions contemplated hereby, including without limitation the fees and
expenses of its counsel, accountants and consultants.


 


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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.


 


	
   

  	
  TREE.COM, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher Hayek

  
	
   

  	
  Name:

  	
  Christopher Hayek

  
	
   

  	
  Title:

  	
  SVP and Chief Accounting Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  /s/ Douglas R. Lebda

  
	
   

  	
  Douglas
  R. Lebda