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Spin-off & Contribution Agreement

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SPIN OFF AND CONTRIBUTION AGREEMENT


BETWEEN


GENERAL CREDIT CORPORATION ("GCC")


AND


GENERAL CREDIT, INC. ("SPIN-OFF SUB")


DATED JULY 18, 2000


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TABLE OF CONTENTS


ARTICLE I


RECITALS; DEFINITIONS.............................................................................................1 1.1 Recitals.................................................................................................1 1.2 Definitions..............................................................................................1


ARTICLE II


CONTRIBUTIONS AND TRANSFERS TO SPIN-OFF SUB.......................................................................3 2.1 Contribution and Transfer of Assets. ....................................................................3 2.2 Excluded Assets..........................................................................................3 2.3 Assumed Liabilities......................................................................................3 2.4 Transfer of Entities, Operations, Assets and Liabilities.................................................4


ARTICLE III


CERTAIN EVENTS OCCURRING BEFORE THE SPIN-OFF RECORD DATE..........................................................4 3.1 Spin-Off.................................................................................................4 3.2 Declaration by Board of Directors of GCC of Spin-Off Record Date.........................................4 3.3 Election of Officers and Directors of Spin-Off Sub.......................................................4 3.4 Reservation of Rights....................................................................................5


ARTICLE IV


SPIN-OFF..........................................................................................................5 4.1 Spin-Off.................................................................................................5


ARTICLE V


RELATED AGREEMENTS................................................................................................5 5.1 Related Agreements Between GCC and Spin-Off Sub..........................................................5


ARTICLE VI


REPRESENTATIONS AND WARRANTIES OF GCC.............................................................................7 6.1 Organization; Qualification..............................................................................7 6.2 Authority Relative to this Agreement and the Related Agreements..........................................7 6.3 Non-Contravention........................................................................................7


ARTICLE VII


REPRESENTATIONS AND WARRANTIES OF SPIN-OFF SUB....................................................................8 7.1 Organization; Qualification..............................................................................8 7.2 Authority Relative to this Agreement and the Related Agreements..........................................8 7.3 Non-Contravention........................................................................................8


ARTICLE VIII


ADDITIONAL AGREEMENTS.............................................................................................8 8.1 Conduct of Business and Management of Assets.............................................................8


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8.2 Forbearances by GCC......................................................................................8 8.3 Taxes and Recording Fees.................................................................................9 8.4 Books, Records, Services and Access to Information.......................................................9 8.5 Confidentiality.........................................................................................10 8.6 Public Announcements....................................................................................10 8.7 Efforts to Consummate...................................................................................10 8.8 Further Assurances......................................................................................11 8.9 Instruments of Conveyance and Transfer, etc.............................................................11 8.10 Assignment of Contracts, Rights, etc....................................................................11 8.11 Insurance for Assets and Business after Contribution Date...............................................12


ARTICLE IX


DELIVERIES, ETC., IN CONNECTION WITH SPIN-OFF....................................................................12


9.1 Effectiveness of Spin-Off...............................................................................12 9.2 Deliveries by GCC.......................................................................................12 9.3 Deliveries by Spin-Off Sub..............................................................................13 9.4 Deliveries of Related Agreements........................................................................13


ARTICLE X


AMENDMENT AND WAIVER.............................................................................................13 10.1 Amendment...............................................................................................13 10.2 Survival................................................................................................13 10.3 Extension; Waiver.......................................................................................13


ARTICLE XI


GENERAL PROVISIONS...............................................................................................14 11.1 Interpretation..........................................................................................14 11.2 Counterparts............................................................................................14 11.3 Miscellaneous...........................................................................................14


SCHEDULES


Schedule 2.2 - Excluded Assets Schedule 2.3 - Excluded Liabilities Schedule 3.3 - Officers and Directors of Spin-Off Sub Schedule 6.3 - Noncontravention


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EXHIBITS


EXHIBIT A - SUBSIDIARIES OF GCC EXHIBIT B - ASSIGNMENT AND ASSUMPTION AGREEMENT EXHIBIT C - APPOINTMENT OF TAX LIABILITY INCURRED WITH RESPECT
TO STRADDLE PERIODS AND OTHER TAX MATTERS


EXHIBIT D - WARRANT PROCEEDS AGREEMENT EXHIBIT E - NON-COMPETITION AND NON-SOLICITATION AGREEMENT


EXHIBIT F - STOCK OPTION LIST


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SPIN-OFF AND CONTRIBUTION AGREEMENT


This SPIN-OFF AND CONTRIBUTION AGREEMENT (the "Agreement"), dated as of July 18, 2000, is made by and between General Credit Corporation, a New York corporation ("GCC") and General Credit, Inc., a Florida corporation and wholly owned subsidiary corporation of GCC ("Spin-Off Sub").


RECITALS


WHEREAS, GCC has engaged in the check factoring and related business (the "Business") directly and through its subsidiary corporations and desires to contribute to Spin-Off Sub substantially all of GCC's assets and Spin-Off Sub will assume substantially all of GCC's liabilities, including, without limitation, the shares of capital stock GCC owns in the subsidiary corporations listed on EXHIBIT A (the "GCC Subs"), which relate to the Business (collectively, the "Business Assets and Liabilities"), other than the Excluded Assets and Excluded Liabilities, upon the terms and subject to the conditions of this Agreement


WHEREAS, upon the terms and subject to the conditions of this Agreement, on the Spin-Off Date (as hereinafter defined), GCC desires to distribute all of the issued and outstanding shares of capital stock of Spin-Off Sub PRO RATA to GCC shareholders of record as of the Spin-Off Record Date (as hereinafter defined) in the form of a dividend in the ratio (the "Exchange Ratio") of one (1) Spin-Off Sub Common Share to each one (1) GCC Common Share held by each such GCC shareholder as of such date; and


WHEREAS, this Agreement is entered in connection with the proposed merger (the "Merger") of a newly formed wholly owned subsidiary of GCC with and into Diamond Dealing.com, Inc. ("DDI") upon the terms and subject to the conditions set forth in that certain Agreement and Plan of Reorganization and Merger, as a result of which, among other things, DDI will become a wholly owned subsidiary corporation of GCC.


NOW, THEREFORE, in consideration of the foregoing and the representations, warranties and agreements contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


ARTICLE I
RECITALS; DEFINITIONS


1.1 RECITALS. The above stated Recitals are true and correct and are hereby incorporated by reference into this Agreement.


1.2 DEFINITIONS. As used herein, the following terms have the following meanings:


"Affiliate," with respect to any party, means a party, person or entity that, directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such party, whether through the ownership of voting securities, by contract or otherwise.


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"Authority" means any national, federal, state or local governmental, judicial or regulatory agency or authority within or without the United States.


"Business Assets and Liabilities" means all of the assets and liabilities of GCC except Excluded Assets and Excluded Liabilities, respectively.


"Business" has the meaning set forth in the introductory paragraph hereof.


"Confidential Information" has the meaning set forth in Section 8.5.


"Contribution Date" means the time and day on which the Assets are contributed to Spin- Off Sub pursuant to Section 2.1.


"Effective Time" shall mean the time that the Spin-Off is consummated.


"Exchange Act" means the Securities Exchange Act of 1934, as amended.


"Exchange Ratio" has the meaning set forth in the Recitals.


"Excluded Assets" has the meaning set forth in Section 2.2.


"Excluded Liabilities" has the meaning set forth in Section 2.3(b).


"GCC Subs" has the meaning set forth in the introductory paragraph hereof.


"GCC" has the meaning set forth in the introductory paragraph hereof.


"GCC Common Shares" means the shares of common stock, $.001 par value per share, of GCC.


"Merger" has the meaning set forth in the Recitals.


"Person" means an individual, partnership (general or limited), corporation, association or other form of business organization (whether or not regarded as a legal entity under applicable law), trust, estate or any other entity.


"Related Agreements" means all of the agreements listed in Article V.


"Representative," with respect to any party, means any officer, director, employee, representative, consultant or advisor of such party.


"Securities Act" means the Securities Act of 1933, as amended.


"Spin-Off" has the meaning set forth in the Recitals.


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"Spin-Off Date" means the time and day on which the Spin-Off is consummated pursuant to Section 4.1.


"Spin-Off Record Date" means the time and day that the Board of Directors of GCC, as contemplated by Article III, designates as the record date for determining the names and holdings of the GCC shareholders entitled to participate in the distribution of Spin-Off Sub Common Shares contemplated as part of the Spin-Off.


"Spin-Off Sub" has the meaning set forth in the introductory paragraph hereof.


"Spin-Off Sub Common Shares" means the authorized shares of common stock, $.001 par value, of Spin-Off Sub.


"Subsidiary", when used with respect to any Person, means any corporation or other business entity, whether or not incorporated, of which such Person holds, directly or indirectly, more than 50% of the securities or interests having, by their terms, ordinary voting power to elect members of the Board of Directors, or other persons performing similar functions with respect to such entity.


ARTICLE II
CONTRIBUTIONS AND TRANSFERS TO SPIN-OFF SUB


2.1 CONTRIBUTION AND TRANSFER OF ASSETS. At the Effective Time, GCC shall contribute to Spin-Off Sub all of GCC's right, title and interest in and to the Business Assets and Liabilities.


2.2 EXCLUDED ASSETS. The assets listed on SCHEDULE 2.2 (collectively, the "Excluded Assets") shall be excluded from the Business Assets and Liabilities.


2.3 ASSUMED LIABILITIES.


(a) Except as expressly provided herein, Spin-Off Sub shall assume and pay and indemnify GCC with respect to all contracts, obligations and liabilities included in the Business Assets and Liabilities, whether accrued, absolute, contingent or otherwise, and whether due or to become due, including, without limitation, all obligations of GCC acting as a guarantor, and all obligations under leases and other executory contracts and liabilities, whether arising as a result of the transactions contemplated hereby, existing on the date hereof, or based on facts or actions arising on or prior to the Spin-Off Date, whether or not such obligations shall have been disclosed herein (collectively, the "Assumed Liabilities").


(b) Notwithstanding the provisions of Section 2.3(a), the liabilities and obligations listed on SCHEDULE 2.3 (collectively, the "Excluded Liabilities") shall be excluded from the Business Assets and Liabilities.


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(c) The Assumed Liabilities will include all liabilities and obligations of GCC resulting from the breach of any representation or warranty or the failure to satisfy any covenant under this Agreement except for Excluded Liabilities.


2.4 TRANSFER OF ENTITIES, OPERATIONS, ASSETS AND LIABILITIES.


(a) Prior to the Spin-Off Date, GCC and Spin-Off Sub agree to take such action as may be necessary or appropriate, to cause all of the Business Assets and Liabilities (including, without limitation, all agreements relating thereto), to be properly conveyed or assigned to Spin-Off Sub. Except as otherwise provided in this Agreement, Spin-Off Sub shall bear the costs of such conveyances.


(b) In the event that the transfer of all Business Assets and Liabilities is not acco
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