Legal Dissolution Clauses

LEGAL DISSOLUTION CLAUSES

This Legal Dissolution Clauses Agreement (the Agreement) is entered into as of Date: by and between Party A Name: , Entity Type: Corporation LLC Partnership Individual, Address: ; and Party B Name: , Entity Type: Corporation LLC Partnership Individual, Address: .

RECITALS

WHEREAS, the Parties have previously conducted business together pursuant to certain agreements and arrangements and now desire to establish agreed procedures for dissolution, winding up and final distribution of assets; and

WHEREAS, the Parties wish to provide clear, binding procedures that govern the occurrence of dissolution events, appointment and authority of a liquidator, notice to creditors and claimants, allocation of liabilities, and distribution of remaining assets; and

WHEREAS, the Parties intend that the provisions set forth in this Agreement shall be final and binding and shall control the winding up and termination process without further dispute or unnecessary delay.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below:

(a) "Effective Date" means the date on which the dissolution becomes effective, as set forth in Section 3 below; (br) "Dissolution Event" means any event described in Section 2 that constitutes a cause for dissolution; and (c) "Liquidator" means the individual or entity appointed pursuant to Section 4 to wind up the affairs of the Parties.

2. DISSOLUTION EVENTS

The Parties agree that dissolution shall occur upon the happening of any of the following events (each a "Dissolution Event"): (i) voluntary written agreement of both Parties to dissolve; (ii) entry of a final decree of dissolution by a court of competent jurisdiction; (iii) insolvency or inability to pay debts as they mature; or (iv) any other event agreed in writing by both Parties.

Selection of dissolution type: Voluntary Dissolution Involuntary Dissolution Other (describe below)

3. EFFECTIVE DATE OF DISSOLUTION

The Effective Date of dissolution shall be: unless otherwise agreed in writing by the Parties. The Liquidator shall provide written notice of the Effective Date to all known creditors and claimants in accordance with Section 6.

4. APPOINTMENT AND AUTHORITY OF LIQUIDATOR

Upon the Effective Date, the Parties hereby appoint:

The Liquidator shall have full authority to wind up and liquidate assets and business affairs, including but not limited to: collecting and liquidating assets, settling or contesting claims, negotiating and executing releases, paying creditors, filing necessary tax and reporting returns, and distributing remaining assets to the Parties in accordance with this Agreement. The Liquidator shall act in good faith, with reasonable care and in the best interests of the Parties.

5. WINDING UP PROCEDURES AND TIMELINE

The Liquidator shall commence winding up within ten (10) days after the Effective Date and shall use commercially reasonable efforts to complete winding up within days, subject to extensions for cause. Winding up shall include:

1. Inventory, valuation and disposition of assets;
2. Notification to and settlement with claimants and creditors;
3. Payment or reservation for taxes and contingent liabilities;
4. Preparation and filing of necessary closing tax returns; and
5. Final distribution of remaining assets in accordance with Section 6.

6. CLAIMS, CREDITORS AND DISTRIBUTIONS

The Liquidator shall give notice to all known creditors and reasonably ascertain unknown creditors by publishing notice if required by applicable law. The Liquidator shall pay or make reasonable provision for payment of all known liabilities and obligations in the following priority: (a) administrative costs of winding up and fees of the Liquidator; (b) secured creditors to the extent of collateral value; (c) unpaid taxes; (d) general unsecured creditors; and (e) finally, distributions to the Parties.

The Parties agree to the following allocation of net distributable proceeds:

7. TAX MATTERS

The Liquidator shall prepare and file all tax returns required with respect to the period up to the Effective Date and any final returns required by applicable law. Any tax liabilities arising out of the business operations or transfer of assets prior to the Effective Date shall be satisfied from the assets of the Parties in accordance with the priority rules in Section 6. The Parties shall cooperate to provide documentation and execute filings reasonably necessary to complete federal, state and local tax obligations.

8. REPRESENTATIONS, WARRANTIES AND COVENANTS

Each Party represents and warrants that: (a) it has full power, authority and legal right to enter into and perform this Agreement; (b) the execution and performance of this Agreement will not violate any agreement or law to which such Party is subject; and (c) there are no undisclosed liabilities, except as disclosed in writing to the Liquidator prior to the Effective Date. Each Party covenants to cooperate in the winding up process and to provide reasonable access to records and personnel.

9. RELEASE, INDEMNITY AND SURVIVAL

Upon final distribution, and except for obligations expressly reserved in this Agreement, the Parties shall release one another from further claims arising prior to the Effective Date. Each Party agrees to indemnify and hold harmless the other Party and the Liquidator from any losses, claims or liabilities resulting from misrepresentation, fraud or breach of this Agreement by the indemnifying Party. Provisions that by their nature are intended to survive termination or dissolution shall survive, including but not limited to indemnification, tax obligations and confidentiality.

10. CONFIDENTIALITY

The Parties shall maintain the confidentiality of proprietary information obtained in connection with the affairs being wound up and shall not disclose such information except as required by law, regulatory authority, or to perform the obligations of winding up as set forth in this Agreement.

11. NOTICES

All notices, requests and other communications required or permitted under this Agreement shall be in writing and delivered to the Parties at their addresses set forth below or to such other address as a Party designates by written notice in accordance with this Section.

12. AMENDMENTS; WAIVER; COUNTERPARTS

This Agreement may be amended or modified only by a written instrument executed by both Parties. No waiver of any provision shall be effective unless in writing and signed by the Party against whom enforcement is sought. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

13. ENTIRE AGREEMENT; SEVERABILITY; GOVERNING LAW

This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether oral or written. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect and shall be construed so as to best effectuate the Parties' intent. This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to its conflict of law principles.

14. MISCELLANEOUS PROVISIONS

The Parties acknowledge that the covenants and obligations contained in this Agreement are reasonable and necessary to protect their respective interests. Each Party represents that the person executing this Agreement on its behalf is duly authorized to do so. The Parties agree to execute such additional documents and take such further actions as may be necessary to carry out the purposes of this Agreement.

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