Legal Independence Agreement

LEGAL INDEPENDENCE AGREEMENT

This Legal Independence Agreement ("Agreement") is made and entered into as of Effective Date: , by and between Party A Name: , Entity Type: Individual Corporation LLC Other, Principal Place of Business: ; and Party B Name: , Entity Type: Individual Corporation LLC Other, Principal Place of Business: . Each of Party A and Party B may be referred to individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, the Parties have heretofore engaged in certain business arrangements and there exists a need to establish formally the legal independence of Party B from Party A for regulatory, contractual, tax and governance purposes; and

WHEREAS, Party A desires to effectuate the transfer, allocation, or confirmation of certain rights, assets, responsibilities and obligations to reflect Party B's independent legal status, and Party B desires to accept such transfer, allocation, or confirmation under the terms set forth herein; and

WHEREAS, the Parties intend by this Agreement to define their respective rights and obligations following the recognition of Party B's legal independence.

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

1.1. "Independent Status" means the legal condition under which Party B conducts its operations, enters into contracts, maintains separate books and records, files taxes independently and is not an alter ego of Party A.

1.2. "Transferred Assets" means those assets, contractual rights, permits and licenses identified in Exhibit A attached hereto and incorporated by reference, which shall be transferred to Party B as provided in this Agreement.

2. RECOGNITION OF INDEPENDENCE

2.1. Acknowledgement. Party A hereby acknowledges and confirms that, as of the Effective Date, Party B shall be independent for all legal purposes described herein, entitled to act and bind itself independently, and shall not be deemed a division, branch, or agent of Party A except as otherwise expressly provided in this Agreement.

2.2. Autonomy of Governance. Party B shall adopt and maintain its own governance documents, bank accounts, accounting records and management controls reasonably necessary to effectuate and preserve its Independent Status.

3. TRANSFER AND ASSUMPTION OF ASSETS AND LIABILITIES

3.1. Transfer. On or before , Party A shall transfer to Party B all Transferred Assets free and clear of liens except as disclosed in writing to Party B prior to the Effective Date.

3.2. Assumption. Party B shall assume only those liabilities expressly identified in Exhibit B and shall not assume any other liabilities or obligations of Party A unless expressly agreed in writing.

4. REPRESENTATIONS AND WARRANTIES

4.1. By Party A. Party A represents and warrants that (a) it has full corporate power and authority to enter into this Agreement; (b) the execution, delivery and performance hereof will not violate any law, contract or order applicable to Party A; and (c) the Transferred Assets are owned by Party A free and clear of undisclosed liens and encumbrances except as disclosed in Exhibit A.

4.2. By Party B. Party B represents and warrants that (a) it has the capacity and authority to enter into and perform this Agreement; (b) it will maintain records and controls necessary to demonstrate its Independent Status; and (c) it is not subject to any restriction that would prevent consummation of the transactions contemplated herein.

5. COVENANTS

5.1. Non-Representation. After the Effective Date, neither Party shall represent that the other Party has authority to act as its agent for any purpose except pursuant to a separate written instrument signed by both Parties.

5.2. Separate Records. Each Party shall maintain separate and complete books, bank accounts and tax filings and shall not commingle funds or assets of the other Party.

6. NON-INTERFERENCE; NON-SOLICITATION

6.1. Non-Interference. Each Party agrees not to interfere with the other's business relationships, contracts or operations following the Effective Date, except as expressly permitted in writing.

6.2. Non-Solicitation. For a period of months after the Effective Date, neither Party shall solicit for employment or engagement the workforce of the other Party who were engaged as of the Effective Date without prior written consent.

7. CONFIDENTIALITY

7.1. Confidential Information. "Confidential Information" means any non-public information disclosed by one Party to the other in connection with the transactions contemplated by this Agreement. Each receiving Party shall hold Confidential Information in strict confidence and shall not disclose it to third parties except as required by law or with prior written consent.

8. INDEMNIFICATION

8.1. Indemnity by Party A. Party A shall indemnify, defend and hold harmless Party B from and against any third-party claims arising from acts or omissions occurring prior to the Effective Date, except to the extent such claims arise from Party B's breach of this Agreement or pursuant to liabilities expressly assumed by Party B.

8.2. Indemnity by Party B. Party B shall indemnify, defend and hold harmless Party A from and against claims arising from Party B's operations, actions or omissions occurring on or after the Effective Date, including those related to assumed liabilities.

9. TAXES AND FILINGS

9.1. Responsibility. Each Party shall be solely responsible for the filing and payment of taxes attributable to its operations following recognition of Independent Status. The Parties agree to cooperate in good faith to allocate tax liabilities for periods that include the Effective Date.

9.2. Cooperation. The Parties shall provide one another with reasonable assistance and access to records necessary to prepare any tax returns or respond to tax authority inquiries, subject to confidentiality protections herein.

10. NOTICES

Notices shall be in writing and shall be deemed given when delivered personally, when sent by certified mail return receipt requested, or when delivered by nationally recognized overnight courier, to the addresses provided above or to such other address as a Party may designate by notice to the other.

11. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to principles of conflicts of law that would result in the application of the laws of another jurisdiction.

12. ENTIRE AGREEMENT

This Agreement, including all exhibits and schedules hereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and negotiations, whether written or oral.

13. SEVERABILITY

If any provision of this Agreement is held invalid or unenforceable by a court of competent jurisdiction, such provision shall be modified or severed to the minimum extent necessary to render it enforceable, and the remaining provisions shall remain in full force and effect.

14. AMENDMENTS

Any amendment or modification of this Agreement shall be effective only if in writing and signed by duly authorized representatives of both Parties.

15. WAIVER

No waiver of any breach or right under this Agreement shall be effective unless in writing and signed by the waiving Party. No waiver shall constitute a waiver of any other or subsequent breach.

16. COUNTERPARTS; ELECTRONIC SIGNATURES

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures provided by electronic means or in portable document format shall be treated as original signatures for all purposes.

17. MISCELLANEOUS

17.1. Assignment. Neither Party may assign its rights or obligations under this Agreement without the prior written consent of the other Party, except to an affiliate or successor entity by merger or sale of substantially all assets provided that the assignee assumes the assigning Party's obligations hereunder.

17.2. Remedies. The Parties acknowledge that monetary damages may be inadequate to remedy certain breaches of this Agreement and that the non-breaching Party may seek injunctive relief and other equitable remedies in addition to any other remedies available at law or in equity.

Sign Now