Common use of Spin-Off Transaction Clause in Contracts

Spin-Off Transaction. Singer shall, prior to the Closing, (i) transfer, convey, and assign to one or more of its Subsidiaries (the "Spin-Off Companies")all of the assets of the Companies other than the Remaining Assets, including but not limited to all of the fixed assets and inventory located in Singer's four (4) existing retail stores formerly owned by Vision Optical Co., Inc. (if not otherwise converted to Franchises prior to Closing) (collectively, the "Company Stores") and all of the intercompany and shareholder receivables (but not accounts receivable or any notes receivable due from Existing Franchisees (all of which are set forth in Section 3.28 of the Disclosure Schedule); (ii) cause the Spin-Off Companies to assume all liabilities and obligations, under all of the Contracts and leases, other than those included in the Remaining Assets; (iii) cause the Spin-Off Companies to assume one or more of each and every one all of the obligations and/or liabilities of the Companies arising and/or accruing at any time prior to the Closing and all obligations and/or liabilities of each of the Companies, except those obligations and liabilities arising and/or accruing from and after the Closing pursuant to those Contracts to be included as part of the Remaining Assets which are the only liabilities intended to remain with Singer after the Exchange of Stock; and (iv) distribute the stock of the Spin-Off Companies to the Shareholders in a transaction intended to qualify under Sections 368(a)(1)(D) and 355 of the Code as a tax-free "Spin-Off" (the "Spin-Off Transaction"). The Spin-Off Transaction shall include agreements, each to be in form and substance acceptable to counsel to the parties hereto, which provides inter alia, (i) for the assumption, by the Spin-Off Companies, on a joint and several basis, of all liabilities and obligations of the Companies which arose and/or accrued at any time prior to the Closing; (ii) for the assumption, by the Spin-Off Companies, of all leases, contracts and/or other agreements to which any of the Companies is a party, other than the Franchise Agreements and related documents with Existing Franchisees and the leases for all of the Companies' real estate other than its corporate offices and other than the leases for the two (2) Company Stores described in Subsection 5.2(f) hereof, each of which leases shall be assigned to and assumed by the Spin-Off Company which is the franchisee of each such location); (iii) for the indemnification of Sterling and Singer, on a joint and several basis, of all of the obligations and liabilities of the Shareholders hereunder and under each of the Closing Documents, as well as all liabilities, claims, demand, actions causes of action, suits, proceedings and/or investigations (together with reasonable attorneys' fees and disbursements) which arose and/or accrued prior to the Closing; all as contemplated by Section 1.10 and Section 10 hereof; and (iv) the obligation of the Shareholders, upon receipt of the proceeds of sale from the Initial Sale Shares, to cause one or more of the Spin-Off Companies to pay off the principal balance, as of the Closing Date, of all mortgages on the Real Estate, together with accrued and unpaid interest thereon (to the date of Closing) and all interest accruing thereon from and after the Closing Date (to the date of such payment by the Shareholders) and any prepayment penalties required to be paid by the mortgagor upon the prepayment of said mortgages.

Spin-Off Transaction. Singer shall, prior to the Closing, (ia) transfer, conveyPromptly following execution of this Agreement, and assign to one or more of its Subsidiaries (in any case within 7 business days thereafter, Seller will deposit with the "Spin-Off Companies")all of the assets of the Companies other than the Remaining Assets, including but not limited to all of the fixed assets and inventory located in Singer's four (4) existing retail stores formerly owned by Vision Optical Co., Inc. (if not otherwise converted to Franchises prior to Closing) (collectively, the "Company Stores") and all of the intercompany and shareholder receivables (but not accounts receivable or any notes receivable due from Existing Franchisees (all of which are set forth in Section 3.28 of the Disclosure Schedule); (ii) cause Registry the Spin-Off Companies to assume all liabilities and obligations, under all of the Contracts and leases, other than those included in the Remaining Assets; (iii) cause the Project. The Spin-Off Companies to assume one or more of each and every one all of the obligations and/or liabilities of the Companies arising and/or accruing at any time prior Project shall provide that there are no Liabilities related to the Closing Spontania Business other than the Assumed Employee Liabilities, that no Identified Creditor will become a creditor of Newco, and all obligations and/or liabilities of each of the Companies, except those obligations and liabilities arising and/or accruing from and that after the Closing pursuant to those Contracts to be included as part of the Remaining Assets which are the only liabilities intended to remain with Singer after the Exchange of Stock; and (iv) distribute the stock execution of the Spin-Off Companies Transaction, (i) Newco will be organized as a new entity; (ii) the Spontania Assets will be transferred to Newco, free and clear of all Liabilities and Encumbrances except the Assumed Spontania Liabilities; (iii) Newco will assume the Assumed Spontania Liabilities (and none others); (iv) the Seller Employees identified by Purchaser and who accept employment with Newco will no longer be Seller Employees but will be Newco Employees; and (v) all of the Shares will be held by Seller. (b) After the presentation of the Spin-off Project to the Shareholders in a transaction intended Registrar, Seller shall make such filings and notifications as appropriate under Spanish Law related to qualify under Sections 368(a)(1)(D) and 355 of the Code as a tax-free "Spin-Off" (the "Spin-Off Transaction"), including notification to creditors by publication. The In the event that, during such notification process, (i) any Identified Creditor listed in the Spin-Off Project timely objects to the Spin-Off Transaction shall include agreements, each to because it determines it will be less secure following such Spin-Off Transaction or (ii) any additional third party (or parties) who is not listed in form and substance acceptable to counsel to the parties hereto, which provides inter alia, (i) for the assumption, by the Spin-Off CompaniesProject or Public Deed or related process asserts it is a creditor of Seller (each such creditor in (i) or (ii), on an “Objecting Creditor”), then the following shall apply: (i) Seller will have a joint period of thirty days following receipt of any notice from an Objecting Creditor to work in good faith to resolve the dispute raised by such Objecting Creditor and several basis, of all liabilities and obligations to obtain resolution of the Companies Objecting Creditor’s claim. If Seller and an Objecting Creditor agree upon an amount to settle the Objecting Creditor’s claim (in each case, an “Agreed Amount”), then Seller shall pay such Objecting Creditor the Agreed Amount directly or, if Seller notifies Purchaser that Seller does not have sufficient resources to pay such amount, then Purchaser may elect to pay such Objecting Creditor the Agreed Amount (in each case of payment by Purchaser, a “Direct Creditor Payment”), which arose and/or accrued shall reduce the Purchase Price. All Direct Creditor Payments to be made hereunder shall be paid at Closing, subject to the other terms and conditions of this Agreement and subject to obtaining an appropriate release from such Objecting Creditor. In the case of a Direct Creditor Payment, Seller shall provide Purchaser with a full statement of facts of the nature of the dispute between Seller and Objecting Creditor, including such information as necessary to indicate how the parties to the dispute agreed upon the Agreed Amount, prior to providing Purchaser with payment instructions and other necessary details for Purchaser’s satisfaction. (ii) If Seller and an Objecting Creditor do not timely resolve the dispute between such Objecting Creditor and Seller, Purchaser may elect to offer to establish at Closing an escrow amount (a “Creditor Escrow”) for an amount mutually agreed to between the Seller and the specific Objecting Creditor (which will include an estimated amount of interest) in consideration of the Objecting Creditor agreeing in writing (in form reasonably acceptable to Purchaser) to (a) the Spin-Off Project and (b) the release of Newco from any time claims. It shall be Seller’s responsibility to first approach the Objecting Creditor with a proposal (a “Proposal”) for resolution of such Objecting Creditor’s claims and, once such Proposal is agreed upon in writing by Seller and the Objecting Creditor, as contemplated above, to then approach Purchaser, which shall then decide whether or not to make the election referenced in the first sentence hereof. Any amounts paid into a Creditor Escrow pursuant to an agreed upon Proposal shall reduce the Purchase Price. A separate Creditor Escrow will be established under the Escrow Agreement (or otherwise as may be agreed) for each Objecting Creditor with respect to which Purchaser elects to offer to establish such an escrow in connection with each accepted Proposal. (iii) With respect to any Objecting Creditor whose claim is not resolved pursuant to Section 2.2.(b)(i) or Section 2.2(b)(ii) (including any circumstance where Purchaser, Seller or the Objecting Creditor refuses, for any reason, to agree upon a Proposal or to allow a Creditor Escrow to be established, Purchaser may elect one of the following options: (A) Purchaser may enter into an agreement with each such remaining Objecting Creditor under which Purchaser will directly pay to each such Objecting Creditor an amount (“Release Amount”) sufficient to obtain a release in favor of Purchaser from each such Objecting Creditor and each such Objecting Creditor will assign to Seller the Objecting Creditor’s claim against Seller. Purchaser will then be able to pursue such claim against Seller directly and, if the dispute is resolved prior to the Closingtermination of the Escrow Fund, Purchaser shall be entitled to recover the established amount from the Escrow Fund. (B) Purchaser may deem such lack of resolution to be a terminable event (a “Termination Right”) and elect to terminate the Agreement in accordance with Section 9.1(f). (iv) Purchaser will not make any Direct Creditor Payment or deposit any amount into a Creditor Escrow unless it is satisfied, in its sole discretion, that the objections of all Objecting Creditors have been resolved or are likely to be resolved under the provisions of Section 2.2(b). If it appears to Purchaser that the sum of the amounts to be paid (i) to Identified Creditors who did not become Objecting Creditors; (ii) to Objecting Creditors as Direct Creditor Payments; and (iii) into escrow as Creditor Escrows will exceed the Maximum Creditor Amount, then Purchaser shall have the right to terminate this Agreement in accordance with Section 9.1(e). (v) Seller shall provide Purchaser with satisfactory documentary evidence for resolving claims of creditors that they claim to have resolved pursuant to this Section 2.2. (c) Once the assumptionSpin-off Project has been registered and the period for opposition of creditors has elapsed, by the Seller will hold a shareholder meeting within [3] days thereafter and pass into a public deed the decision to spin-off the Spontania Business and present the same to the ▇▇▇▇▇▇▇▇ Registry providing to the Purchaser a copy of the presentation voucher. In any case, the Purchaser will have to verify the contents of the referred Public Deed before it is granted. (d) If the Spin-Off CompaniesPublic Deed is not registered due to any type of defect, of all leases, contracts and/or other agreements to which any Seller will inform the Purchaser within two days after Seller learns of the Companies is inability to effect registration. Should the defect be of a partytechnical or immaterial nature, other than the Franchise Agreements and related documents Seller will be obliged to immediately amend the given document in order to comply with Existing Franchisees and the leases for all of Registrar’s objection. If the Companies' real estate other than its corporate offices and other than defects identified or created by the leases for the two (2) Company Stores described Registrar alter in Subsection 5.2(f) hereof, each of which leases shall be assigned to and assumed by any way the Spin-Off Company which Transaction or Acquisition Transaction referred to in this Agreement, or if the defects are such that they are not capable of being cured, the Parties shall negotiate in good faith in order to find a fair solution during a period of [20] days. If no agreement is timely reached, the franchisee Purchaser shall have the right, but not the obligation, to terminate the Agreement in accordance with Section 9.1(g). (e) Once the Spin-off Project has been registered and the period for objection by creditors has elapsed, the Seller shall provide Purchaser, within [3] days thereafter, with a statement regarding the status of each unpaid creditor, whether an Objecting Creditor or not, including the details of any disputed amount. (f) Seller shall provide Purchaser with such location); (iii) for additional information as Purchaser may request within [3] days of Purchaser’s request, including information about Seller’s plans and recommendations to resolve claims made by unpaid creditors. After receiving all requested information, Purchaser shall prepare within [3] days a final statement of status of creditors identifying separately all Direct Creditor Payments, Creditor Escrows, creditors to whom direct payments have been made by Seller, and unpaid creditors. Seller will certify and accept said final statement of creditors and Purchaser will make decisions on payment or termination only in the indemnification of Sterling and Singer, on a joint and several basis, of all event that the sum of the obligations and liabilities of the Shareholders hereunder and under each of the Closing Documentsamounts to be paid to Identified Creditors who do not object, as well Direct Creditor Payments, and to be placed into escrow as all liabilitiesa Creditor Escrow, claimswill exceed the Maximum Creditor Amount, demandwithin [5] days of Seller certifying said final statement. Seller and Purchaser agree to establish more detailed procedures to implement this subsection, actions causes of action, suits, proceedings and/or investigations as determined necessary. (together with reasonable attorneys' fees and disbursementsg) which arose and/or accrued prior Prior to the Closing; , the Seller shall carry out all as contemplated by Section 1.10 and Section 10 hereof; and necessary steps to file before the Spanish Data Protection Agency (ivSDPA) the obligation necessary documents to request that Newco is appointed as the Data Controller of all the registered files in the SDPA’s Registry of which Seller is the current Data Controller. The Seller shall provide the Purchaser with the said documents duly sealed by the SDPA. Seller shall diligently prosecute such change, even following the Closing. (h) Prior to Closing, the Seller shall carry out all necessary steps to file before the Spanish Intellectual Property registry (SIPR) the necessary documents to request the transfer of all the rights of the ShareholdersSpontania Software (also including, upon receipt for the sake of clarity, the proceeds of sale from Webcall Software) to Newco. The Seller shal provide the Initial Sale Shares, to cause one or more of Purchaser with the Spin-Off Companies to pay off the principal balance, as of the Closing Date, of all mortgages on the Real Estate, together with accrued and unpaid interest thereon (to the date of Closing) and all interest accruing thereon from and after the Closing Date (to the date of such payment said documents duly sealed by the Shareholders) and any prepayment penalties required to be paid by SIPR. Seller shall diligently prosecute such change, even following the mortgagor upon the prepayment of said mortgagesClosing.