Sample Contract-2
DRAFT OF THE COMPLETE FRAGMENTATION AGREEMENT
1. Parties
This Total Partition Agreement (“Agreement”);
On one side:
Trade name: [TRANSFERRED COMPANY NAME] Inc.
Headquarters address: [●]
Trade registry number: [●]
MERSIS number: [●]
Tax office / tax number: [●]
(Hereinafter referred to as "Transferred Company")
On the other hand:
Trade name: [X Inc.]
Headquarters address: [●]
Trade registry number: [●]
MERSIS number: [●]
Tax office / tax number: [●]
On the other hand:
Trade name: [Y Inc.]
Headquarters address: [●]
Trade registry number: [●]
MERSIS number: [●]
Tax office / tax number: [●]
On the other hand:
Trade name: [Z Inc.]
Headquarters address: [●]
Trade registry number: [●]
MERSIS number: [●]
Tax office / tax number: [●]
(X Inc., Y Inc., and Z Inc. will hereinafter be referred to collectively as the "Acquiring Companies.")
The Transferring Company and the Acquiring Companies will be referred to together as "the Parties".
2. Purpose and Scope of the Agreement
2.1. The purpose of this Agreement is to transfer the assets and liabilities of the Transferred Company, in their entirety, to the Acquiring Companies in accordance with the allocation principles set forth in this Agreement and its annexes, resulting in the dissolution of the Transferred Company without liquidation; in return, the shareholders of the Transferred Company will receive shares in the Acquiring Companies, and the entire legal, financial, and administrative process related to the demerger will be regulated.
2.2. The demerger is a full demerger, and all assets, rights, liabilities, contractual relationships, lawsuits and proceedings, employees and other legal positions of the Transferring Company will be transferred to the Acquiring Companies within the framework of the allocation stipulated in this Agreement.
2.3. The parties agree that the demerger will be carried out in accordance with the relevant trade, tax, labor, social security and other legislation.
3. Definitions
This Agreement;
3.1. “Date of Division” is the date on which the division was registered in the commercial registry.
3.2. “ Main Financial Statements ” are the balance sheet, income statement and other financial statements as of [date] which are used as the basis for the demerger,
3.3. “Allocation Schedule”, an annex showing which elements of the transferred company's assets are transferred to which acquiring company.
3.4. “Equalization Amount” is the amount determined to compensate, in cash or otherwise, for any differences that may arise between partners due to share distribution.
3.5. “Transition Period” refers to the period between the date of general assembly approval and the date of registration.
It expresses.
4. Legal Nature of the Division
4.1. The division will result in the termination of the Transferred Company without liquidation and the transfer of its assets to the Acquiring Companies under the principle of universal succession.
4.2. Unless otherwise expressly stated in this Agreement, the assets and liabilities of the Transferring Company shall pass as a whole to the relevant Acquiring Company.
4.3. As a result of the division, the shareholders of the Transferring Company become shareholders of the Acquiring Companies in accordance with the exchange ratio and allocation principles determined in this Agreement.
5. Financial Data Forming the Basis of the Division
5.1. The demerger will be carried out based on the financial statements dated [date] , approved by the governing bodies of the Parties and subject to expert review where necessary
5.2. The Main Financial Statements are an annex to this Agreement and an integral part of the Parties' decision to demerge.
5.3. If any significant change occurs in the financial data forming the basis of the demerger before the registration date, the management bodies of the Party will reassess the situation; if necessary, a supplementary balance sheet, interim balance sheet, or updated allocation schedule will be prepared.
6. Scope of Assets to be Transferred
6.1. The following assets of the Transferred Company shall be transferred to the Acquiring Companies in accordance with the attached lists and allocation schedules:
a. Immovable properties and related real rights,
b. Movable properties, machinery, equipment, fixtures and vehicles,
c. Bank accounts, cash assets and financial instruments,
d. Trade receivables, receivables from partners, advances given,
e. Trade payables, loan debts, financial obligations,
f. Ongoing contracts, orders, offers and commitments,
g. Licenses, permits, authorizations, trademarks, patents, utility models, know-how and other intellectual property elements,
h. Personnel, employment contracts, personnel files and records relating to fringe benefits,
i. Ongoing litigation, enforcement proceedings, arbitration, administrative applications and complaints processes,
j. Letters of guarantee, sureties, pledges, mortgages and other collateral relationships,
k. Inventories, semi-finished products, finished products and commodities,
l. Customer portfolio, supplier portfolio and data sets relating to commercial organization,
m. Tax rights, incentives, investment contributions, rights and obligations arising from exemptions and deductions
. All other assets that are not included in the balance sheet but legally belong to the Transferred Company.
6.2. The scope of assets will be itemized in the annexes to this Agreement, and the explanations contained in the annexes will be given priority in interpretation.
6.3. Each asset shall be deemed transferred together with all liabilities, obligations, contractual relationships, and ancillary rights directly associated with that asset.
7. Excluded Elements
7.1. If explicitly agreed upon by the parties, certain assets may be excluded from the division. In this case, these items are listed separately in the annex entitled "List of Excluded Assets".
7.2. Where an excluded element forms an economic or legal entity with another asset, the impact of this on the demerger process shall be assessed separately by the governing bodies of the Party.
8. Allocation of Assets Among the Acquiring Companies
8.1. The assets of the transferred company shall be distributed among the acquiring companies in accordance with the attached Allocation Schedule and the following principles:
a. Assets to be transferred to X Inc .: [Appendix-X] b. Assets to be transferred to Y Inc .: [Appendix-Y] c. Assets to be transferred to Z Inc .: [Appendix-Z]
8.2. The allocation process will be based on economic integrity, continuity of operations, the transfer of the relevant assets and related liabilities together, and operational efficiency.
8.3. In case of any doubt as to which Acquiring Company an asset is allocated, the economic connection and actual intended use of the asset shall be taken as the basis; if this is insufficient, the Parties shall provide clarity through a written protocol.
9. Assignment of Contracts and Ongoing Legal Relationships
9.1. All commercial contracts to which the Transferring Company is a party and which are linked to the relevant Acquiring Company in the allocation schedule shall pass to the relevant Acquiring Company upon registration of this Agreement.
9.2. With regard to contracts requiring the consent of the other party, the Parties shall act together to obtain the necessary consents.
9.3. Ongoing tenders, order processes, framework agreements, distributorship relationships, dealership agreements, supply agreements, license agreements, and similar ongoing debt relationships will be maintained with the relevant Acquiring Company based on the allocation in the allocation schedule.
10. Employee Status
10.1. Employees of the Transferred Company will transfer to the relevant Acquiring Companies in parallel with the transfer of the operational units.
10.2. All personnel rights, including seniority, notice period, leave, wages, bonuses, fringe benefits, social assistance, and similar rights, will be transferred to the relevant Acquiring Companies within the scope required for legal protection.
10.3. Personnel distribution will be shown in an additional list prepared on a unit basis; necessary changes regarding work organization will be planned separately.
10.4. No action that would retroactively affect the personal rights of employees solely on the basis of a division cannot be taken.
11. Receivables, Payables and Financial Obligations
11.1. All receivables and payables of the Transferred Company shall be transferred to the Acquiring Company, taking into account the relevant assets or business sector with which they are economically related.
11.2. For debts whose ownership cannot be clearly determined by the Acquiring Company, the cause of the debt, its scope of use, and accounting records are evaluated together.
11.3. The Parties shall jointly carry out the necessary permit and restructuring procedures with the relevant financial institutions regarding credit agreements, leasing relationships, letters of guarantee, bank limits, and other financial obligations.
12. Transfer of Cases, Proceedings and Disputes
12.1. All lawsuits, enforcement proceedings, arbitration, mediation, administrative applications, and complaints to which the Transferring Company is a party shall be transferred to the Acquiring Company, to which the relevant legal relationship is assigned.
12.2. As a party, necessary corrections, declarations, and applications are made to the court, enforcement office, or relevant authority.
12.3. In case of doubt regarding allocation, the underlying legal relationship on which the file is based shall be taken as the basis.
13. Share Exchange Ratio and Share Allocation
13.1. The shares to be given to the shareholders of the Transferring Company in the Acquiring Companies as a result of the demerger will be determined by taking into account the equity of the Transferring Company, the net value of the transferred assets, the existing capital structure of the Acquiring Companies, and the exchange ratio.
13.2. The capital increase and the distribution of new shares in each Acquiring Company shall be shown in the “Share Exchange and Allocation Table” included as an annex to this Agreement.
13.3. Whether shares are registered or bearer shares, share groups, preferential status, and voting rights will be regulated separately in accordance with the relevant articles of association of the Acquiring Company.
13.4. The parties agree that no special benefit will be granted to board members, directors, controlling shareholders or third parties as a result of the division.
14. Equalization Payment
14.1. Due to potential fractional amounts, ratio differences, or the need for economic balance that may arise after the division, an equalization payment may be foreseen in favor of some of the partners.
14.2. If an equalization payment is to be made, the beneficiary partner, the payment amount, the payment date, and the payment method are also shown in the attached table.
14.3. The equalization payment shall be made no later than [●] days after the registration of the division.
15. Capital Increase and Amendments to the Articles of Association
15.1. The acquiring companies will carry out the capital increases required due to the division by a general assembly resolution and will approve the related amendments to the articles of association.
15.2. The new capital structure, number of shares, nominal value, share groups, and ownership distribution will be shown separately for each Acquiring Company.
15.3. Registration and publication procedures shall be completed in accordance with the proper procedures at the relevant trade registry offices.
16. Company Management During the Transition Period
16.1. During the Transition Period between the date of general assembly approval and the registration date, the Transferred Company will continue its ordinary operations in accordance with the principle of good faith.
16.2. During this period, the Transferred Company;
a. It cannot sell assets outside of its ordinary commercial activities,
b. It cannot incur significant debt,
c. It cannot establish new collateral,
d. It cannot distribute extraordinary profits,
e. It cannot enter into substantial transactions without the written agreement of the parties.
16.3. Income, expenses, receivables, and payables arising during the transition period are transferred to the relevant acquiring company accounts based on their business sector and economic affiliation.
17. Declarations and Undertakings
17.1. Each Party declares that it is authorized to sign and perform this Agreement.
17.2. The Transferred Company declares that the asset lists and financial statements have been prepared fairly and accurately; and that there is no material liability knowingly concealed.
17.3. The acquiring companies acknowledge that they are aware of the rights and obligations they will assume as a result of the demerger and that they will make the necessary corporate decisions.
17.4. If it is determined that either Party has made a false statement, the other Parties shall retain the right to claim compensation in accordance with general provisions.
18. Tax Obligations and Official Notifications
18.1. Notifications and applications required by the division to the tax administration, trade registry, social security institution, municipalities, licensing authorities and other official institutions shall be made within the prescribed time limits.
18.2. The declaration, undertaking, notification, registration documents and supplementary documents related to the division shall be prepared and submitted to the relevant authorities within the timeframes stipulated by the legislation.
18.3. The distribution of tax liabilities and other public debts incurred prior to the date of the division and transferred to the Acquiring Companies due to the division will be evaluated within the framework of the allocation schedule and relevant legislation.
18.4. If security is requested by official authorities, the Parties shall cooperate to provide the necessary security, depending on the nature of the obligation.
19. Protection of Creditors
19.1. Announcements, notices, and statements regarding the protection of creditors during the demerger process will be made in accordance with the legislation.
19.2. In the event that creditors request security due to the division, the Parties shall evaluate these requests within the framework of the legal situation and the attribution of the debt.
19.3. The final internal distribution of payments, collateral, or obligations to be undertaken in respect of creditor protection will be determined based on the Acquiring Company to which the debt is allocated.
20. Joint and Several Liability and Recourse in Internal Relationships
20.1. The joint and several liability of the Parties to third parties arising from legislation or legal transactions as a result of the division is reserved.
20.2. If one Party pays, compensates, or provides security for a debt that the other Party is obligated to bear, the Party making the payment may seek recourse against the Party responsible in the internal relationship.
20.3. In the recourse calculation, the cause of origin of the relevant debt, the allocation schedule, economic connection, financial records, and the payment date are taken into account.
20.4. The Party making the recourse claim shall notify the other Party in writing of the situation within [7] days at the latest . Even if this notification is not made, the right of recourse does not disappear in cases where it does not severely impair the other Party's ability to defend itself.
21. Obligations Arising After Registration
21.1. Liabilities arising after the date of the Main Financial Statements but whose economic cause predates the demerger are transferred to the Acquiring Companies according to the relevant business line.
21.2. With regard to tax assessments, litigation risks, penalties, labor claims, or third-party claims that arose later but relate to the period before the division, attribution will be determined according to the underlying event that gave rise to the relationship.
21.3. The parties are obligated to provide each other with information and share documents with respect to such subsequently arising or learned liabilities.
22. Privacy
22.1. The parties shall keep confidential all trade secrets, customer information, pricing data, internal organizational information, financial statements, and contract contents learned during the demerger process.
22.2. Information that is legally required to be disclosed and notifications to official authorities are exceptions to this provision.
22.3. The confidentiality obligation continues for a period of [5] years after the completion of the division
23. Expenses
23.1. Expenses related to the division, such as notary fees, commercial registry fees, consultancy fees, independent audit fees, expert witness fees, announcement fees, translation fees, expert opinions, and similar transaction fees, equally/proportionally/according to the attached sharing schedule .
23.2. Where it is clear that an expense is for the benefit of a particular Acquiring Company or specific to a particular asset, that expense shall be deemed to belong primarily to that Acquiring Company.
24. Ratification and Entry into Force of the Agreement
24.1. This Agreement shall become effective upon its adoption by the governing bodies of the Parties and approval by their general assemblies, and upon completion of the necessary registration and publication procedures.
24.2. Upon registration, the transferred company is dissolved, and this takes effect without requiring a separate liquidation process.
24.3. If registration does not take place for any reason, this Agreement shall automatically become null and void unless the Parties agree otherwise; however, the provisions regarding confidentiality, cost sharing, and liability shall continue to apply.
25. Notifications
25.1. The addresses of the parties as written in this Agreement shall be considered their legal addresses for service of process.
25.2. Unless address changes are notified in writing, notifications sent to the current address shall be deemed valid.
25.3. Notifications made via KEP (Registered Electronic Mail), notary public, registered mail with return receipt, e-mail containing a secure electronic signature, or other methods agreed upon in writing by the Parties are valid.
26. Evidence Agreement
26.1. The parties' commercial books and records, independent audit reports, expert reports, bank records, correspondence, registry records, payrolls, declarations, and official records may be presented as evidence in disputes.
26.2. Records kept electronically also constitute evidence to the extent that they are properly documented.
27. Dispute Resolution
27.1. The parties shall endeavor to resolve any disputes arising from this Agreement primarily through amicable negotiation.
27.2. If negotiation fails to yield results, the Commercial Courts and Enforcement Offices of [Istanbul Anatolian / Istanbul] shall have jurisdiction.
27.3. If the parties so wish, they may also agree to obtain expert opinions of a preliminary nature regarding specific technical calculation, valuation, or ownership disputes.
28. Annexes and Integral Parts of the Agreement
28.1. The following documents are annexed to and an integral part of this Agreement:
Appendix 1: Transferred Company's main financial statements Appendix 2: X Inc. transfer balance sheet and allocation schedule Appendix 3: Y Inc. transfer balance sheet and allocation schedule Appendix 4: Z Inc. transfer balance sheet and allocation schedule Appendix 5: List of immovable properties Appendix 6: List of movable assets, machinery and vehicles Appendix 7: List of bank accounts and financial assets Appendix 8: List of receivables and payables Appendix 9: List of contracts Appendix 10: Personnel transfer list Appendix 11: List of lawsuits and enforcement files Appendix 12: List of collateral, mortgages, pledges and guarantees Appendix 13: List of incentives, investment contributions and tax rights Appendix 14: List of customer and supplier portfolio Appendix 15: List of excluded elements Appendix 16: Share exchange and equalization table Appendix 17: Transition period transaction principles protocol
29. Final Provisions
29.1. This Agreement has been drawn up by the free will of the Parties and all its clauses have been read and accepted.
29.2. Amendments to the agreement shall only be valid with a written decision from the competent authority.
29.3. This Agreement has been drawn up in [●] copies and signed on [date]
COMPANY BEING TRANSFERRED
Title:
Authorized Person:
Signature:
X Inc.
Authorized Person:
Signature:
Y Inc.
Authorized Person:
Signature:
Z Inc.
Authorized Person:
Signature:
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