Winding Up Agreement

WINDING UP AGREEMENT

This Winding Up Agreement (the Agreement) is entered into as of Effective Date: by and between Party A Name: , Entity Type: Individual Corporation LLC, with principal place of business at ; and Party B Name: , Entity Type: Individual Corporation LLC, with principal place of business at .

RECITALS

WHEREAS, the parties have been associated as joint owners or participants in the enterprise described as Business Description: and desire to dissolve and wind up the affairs of that enterprise; and

WHEREAS, the parties wish to set forth the terms, procedures and responsibilities for the identification, collection, liquidation and distribution of the assets, and the satisfaction of liabilities, of the enterprise in an orderly manner; and

NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. DEFINITIONS

1.1 Capitalized terms used in this Agreement shall have the following meanings unless the context otherwise requires: "Assets" means all property, rights, claims and interests of the enterprise of any kind or nature; "Liabilities" means all obligations, debts and claims of the enterprise known or reasonably ascertainable; "Net Proceeds" means Gross Proceeds less costs, expenses, taxes and other deductions described in Section 4.

2. WINDING UP AGENT

2.1 Appointment. The parties hereby appoint Wind-Up Agent Name: to act as the agent to supervise and carry out the winding up of the enterprise's affairs, including collection, liquidation and distribution, subject to the terms of this Agreement.

2.2 Agent Authority. The Wind-Up Agent shall have authority to take all actions reasonably necessary to effect the winding up, including negotiating and settling claims, entering into contracts for sale of assets, retaining professional advisors, and making distributions in accordance with this Agreement, provided that any action reasonably expected to materially affect the rights of either party shall require the prior written consent of both parties.

3. IDENTIFICATION, COLLECTION AND LIQUIDATION OF ASSETS

3.1 Asset Inventory. The Wind-Up Agent shall prepare and deliver to the parties, within thirty (30) days of appointment, a complete inventory of the Assets and an initial estimate of fair market value. Attached Schedule A — Assets (to be completed by the Agent) describes major categories of assets to be liquidated.

3.2 Realization. Assets shall be realized in a commercially reasonable manner for cash or cash equivalents. The Wind-Up Agent shall have discretion as to method of sale, timing, and minimum acceptable bids, subject to the approval procedures set forth in Section 2.2 for materially adverse actions.

4. PAYMENT OF LIABILITIES; DISTRIBUTION OF NET PROCEEDS

4.1 Priority of Payments. From Gross Proceeds realized from liquidation the Wind-Up Agent shall pay or reserve amounts for: (a) reasonable costs and expenses of winding up (including fees of professionals retained by the Wind-Up Agent); (b) taxes and governmental charges; (c) secured claims to the extent validly enforceable against realized proceeds; (d) allowed unsecured claims; and (e) other obligations agreed by the parties in writing.

4.2 Distribution. After payment and reservation under Section 4.1, Net Proceeds shall be distributed to the parties in the following proportions: Party A percentage: and Party B percentage: . If proportions are not specified, distributions shall be made pro rata based on the parties' respective capital accounts as of the Effective Date, adjusted for subsequent agreed changes.

5. TAX MATTERS

5.1 Tax Returns and Filings. The parties shall cooperate in preparing and filing all federal, state and local tax returns and reports that arise from the winding up. The Wind-Up Agent shall prepare final accounting statements reflecting taxable income, gains and losses and shall allocate tax attributes between the parties in accordance with applicable law and the parties' agreed allocation method.

5.2 Tax Indemnity. Each party shall be responsible for its own tax liabilities arising from distributions made under this Agreement. Notwithstanding the foregoing, to the extent taxes are determined to be joint liabilities of the enterprise, the parties shall share such liabilities in the distribution proportions set forth in Section 4.2 unless otherwise agreed in writing.

6. CLAIMS AND LITIGATION

6.1 Assertion and Defense. The Wind-Up Agent shall have authority to pursue, compromise or settle claims on behalf of the enterprise and to defend actions against the enterprise. Settlement of any claim or litigation that would reasonably be expected to require payment in excess of shall require the prior written approval of both parties.

7. ACCOUNTING; FINAL STATEMENT

7.1 Accounting. The Wind-Up Agent shall keep books and records reflecting all receipts and disbursements and shall provide interim accountings to the parties at least quarterly and a final accounting within sixty (60) days after completion of the winding up.

7.2 Final Distribution. Upon acceptance of the final accounting by both parties (or upon resolution of any dispute as provided in Section 11), the Wind-Up Agent shall distribute remaining Net Proceeds and deliver records and instruments of transfer to the parties as appropriate.

8. RELEASES AND INDEMNITY

8.1 Mutual Release. Except for obligations expressly preserved by this Agreement, upon final distribution and delivery of the final accounting, each party releases the other from any further obligations arising out of the enterprise, provided that such release shall not extend to obligations or liabilities incurred by a party as a result of fraud, willful misconduct or gross negligence.

8.2 Indemnity. Each party agrees to indemnify and hold harmless the other and the Wind-Up Agent from and against any losses, liabilities, claims, costs and expenses (including reasonable attorneys' fees) arising from that party's breach of this Agreement or that party's fraud, willful misconduct or gross negligence in connection with the winding up.

9. CONFIDENTIALITY

9.1 Confidentiality. Except as required by law or necessary to effectuate the winding up, the parties shall keep confidential the terms of this Agreement and any nonpublic information obtained in the course of winding up, and shall not disclose such information to third parties without the prior written consent of the other party.

10. NOTICES

10.1 Method. All notices required or permitted hereunder shall be in writing and delivered personally, by certified mail (return receipt requested), or by commercial overnight courier to the addresses set forth below or to such other address as a party may designate by written notice.

11. DISPUTE RESOLUTION

11.1 Negotiation and Mediation. In the event of any dispute arising under this Agreement, the parties shall first attempt in good faith to resolve the dispute by negotiation. If negotiation fails, the parties shall submit the dispute to mediation before a mutually agreed mediator. Costs of mediation shall be split equally unless otherwise agreed.

11.2 Litigation. If the dispute is not resolved by mediation within sixty (60) days after commencement thereof, either party may pursue any remedy at law or in equity. The prevailing party in any litigation shall be entitled to recover its reasonable attorneys' fees and costs.

12. MISCELLANEOUS

12.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Governing Law State: without regard to conflict of laws principles.

12.2 Entire Agreement. This Agreement (including any schedules executed herewith) constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral.

12.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect and the parties shall negotiate in good faith to replace the invalid provision with a valid provision that achieves, to the extent possible, the original intent.

12.4 Amendments and Waiver. No amendment, modification or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties. No failure or delay in exercising any right shall operate as a waiver of that right.

12.5 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument. Execution by electronic signature or facsimile shall be binding.

AUTHORIZATION

Each individual signing this Agreement represents and warrants that he or she is duly authorized to execute and deliver this Agreement on behalf of the party for which he or she signs and that this Agreement constitutes a legal, valid and binding obligation of such party enforceable against it in accordance with its terms.

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