Business Gift Agreement for a Sole Proprietor

BUSINESS GIFT AGREEMENT

THIS BUSINESS GIFT AGREEMENT (the "Agreement”) is made and entered into this ________________ (the "Effective Date”), by and between [INSERT OWNER NAME] (the "Owner”), and [INSERT TRANSFEREE NAME] (the "Transferee”).

WHEREAS, Owner is the sole owner and operator of [INSERT BUSINESS NAME], a sole proprietorship engaged in the business of ___________________ (the "Business”).

WHEREAS, Owner desires to transfer to Transferee, and Transferee desires to acquire from Owner, all of the Transferred Assets (defined below) used in the above described Business;

THEREFORE, the parties hereby enter into this Agreement under the following terms and conditions:

ARTICLE I – DEFINITIONS

1. "Assigned Agreements” means the contracts set forth in the Disclosure Schedule attached hereto.

2. "Copyright Interests” means the copyrightable works or interests Owner may own, or have the right to sublicense of any type worldwide relating to the Transferred Assets, together with all other copyright interests accruing by reason of United States copyright laws, international copyright conventions and any moral rights relating to the Transferred Assets, including the right to sue for, settle, or release any past, present, or future infringement thereof.

3. "Confidential Information” means all Trade Secrets, discussions between the parties, and any and all non-public information relating to the Business, the Transferred Assets, or this Agreement, including, without limitation, all technical, developmental, marketing, sales, operating, performance, cost, know-how, business plans, business methods, process information, product information, customer information, licenses, contracts and agreements that is of value to the Business and is treated as confidential by the parties. Unless otherwise specified, all information transmitted between the parties is presumed to be Confidential Information.

4. "Domain Name Interests” means the domain names listed in the Disclosure Schedule attached hereto as Exhibit A, including the right to sue for, settle, or release any past, present, or future infringement thereof.

5. "Goodwill” means the goodwill of Owner in connection with the Business and Transferred Assets together with the exclusive right for Transferee to represent itself as carrying on the Business in succession to Owner and to carry on the Business (and the Transferred Assets) under any name.

6. "Intellectual Property Rights” means any and all rights associated with works of authorship, including, but not limited to, (1) copyrights, (2) trademark and trade name rights and similar rights, (3) Trade Secret rights, (4) patents and (5) all other intellectual property rights in any jurisdiction throughout the world.

7. "Other Interests” means the interests, other than the Trademark Interests, Assigned Agreements, Copyright Interests, Domain Name Interests or Patent Interests, that Owner may own or have the right to sublicense hereunder in (1) any idea, design, concept, technique, invention, discovery, or improvement, whether or not patentable, but including patents, patent applications, Trade Secrets, and know-how; (2) pictorial, literary, website content, graphic, or audio/visual works, including icons, screens, HTML code, characters, data formats, and reports of any type of sort, including the right to sue for, settle, or release any past, present, or future infringement thereof; and (3) any Trade Secrets of the Business.

8. "Patent Interests” means the patents names listed in the Disclosure Schedule attached hereto as Exhibit A, including, without limitation, the right to sue for past, present and future infringement of the Patent Interests, and the right to collect and receive any damages, royalties, or settlement for such past, present and future infringements and any and all causes of action relating to any of the inventions or discoveries described in the Patent Interests.

9. "Transferred Assets” means all property or assets described in Section 2.1.

10. "Transferred Interests” meansall Copyright Interests, Trademark Interests, Patent Interests, Domain Name Interests and Other Interests acquired by Transferee hereunder

11. "Trademark Interests” means any trademark or service mark interests accruing by reason of United States trademark laws and international trademark conventions that relate to the Transferred Assets, which includes the Goodwill connected with the use of and symbolized by such marks including, without limitation, the right to sue for past, present and future infringement of the Trademark Interests, and the right to collect and receive any damages, royalties, or settlement for such past, present and future infringements and any and all causes of action relating to any of the Trademark Interests, regardless of whether or not such Trademark Interest have been registered.

12. "Trade Secrets” shall have the meaning as provided in the Uniform Trade Secrets Act (Civil Code §3426.1(d)), without limitation, information, including a formula, pattern, compilation, program, device, method, technique, or process that (a) derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use, and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

ARTICLE II – THE TRANSFERRED ASSETS

Section 2.1 Transferred Assets. Owner hereby agrees to transfer to Transferee and Transferee hereby agrees to acquire from Owner the assets and property described below:

• (a) The Domain Name "______________” and any and all associated website content or materials, including all Domain Name Interests and Copyright Interests thereto;
• (b) all customer lists associated with the Business and the Transferred Assets;
• (c) all other customer information which has been gathered by Owner while conducting its Business, including personal information, payment information and customer feedback information, which is lawfully within the possession and control of Owner;
• (d) all the rights relating to the Transferred Assets in connection with contracts, commitments, sales contracts and other contracts and agreements with customers;
• (e) all accounts receivable, notes receivable, accrued interest receivable, claims, deposits, prepayments, refunds, causes of action, rights of recovery, rights of set-off and rights of recoupment with respect to the Transferred Assets;
• (f) the right to use Owner’s signage, branding, and sales pitch;
• (g) any and all logos, displays, creative assets, and other digital graphic files associated with the Business and Transferred Assets;
• (h) all rights to all copyrights, designs, trade styles, trade names, and trademarks including, without limitation, the name "______________” and any other intellectual property used in connection with the Business or the Transferred Assets, including all Copyright Interests and Trademark Interests related thereto;
• (i) any and all agreements, licenses or contracts, in which Owner and/or the Business is a party;
• (j) all Trade Secrets including, but not limited to, all information regarding customers and customers’ requirements, all research, know-how, product formulas and Confidential Information used in the Business;
• (k) all government licenses, permits and approvals issued to Owner with respect to the Business and the Transferred Assets (if any) in effect as of the Closing date, including, but not limited to, those that are listed in the Disclosure Schedule, insofar as such permits are transferable;
• (l) the real property located at [INSERT ADDRESS];
• (m) any and all equipment or machinery used in the operation of the Business; and
• (n) all Goodwill associated with the Business and the Transferred Assets.

Section 2.2 Assumed Liabilities. Transferee shall assume and agree to pay, perform and discharge when due any and all liabilities, commitments, contracts, agreements, and obligations of Owner, whether known or unknown, asserted or unasserted, accrued or unaccrued, absolute or contingent, liquidated or unliquidated, due or to become due, and whether contractual, statutory, or otherwise, arising out of or relating to the Business or the Transferred Assets on or after the Closing, including, but not limited to, the Liabilities listed on Exhibit A (collectively, the "Assumed Liabilities”).

Section 2.3 Conveyance Of Business Interests.

• (a) It is the intent of the parties that the Transferee acquire all assets of the Business. Although the parties have endeavored to list all such assets in this Agreement, it is the intention of the parties that all rights and assets clearly associated with the Business, even if inadvertently omitted from this Agreement, be included in the sale.
• (b) As of the Effective Date, Owner transfers, grants, conveys, assigns, and relinquishes exclusively to Transferee, in perpetuity (or for the longest period of time otherwise permitted by law), all of Owner’s right, title, and interest in and to the Copyright Interests, Patent Interests, Trademark Interests, Intellectual Property Rights and Other Interests in and to the Business, including all associated Goodwill.

ARTICLE III – DELIVERY OF THE TRANSFERRED ASSETS

Section 3.1 Delivery of Transferred Assets. After the execution of this Agreement, Owner shall deliver any and all inventory, documents, lists, information and other Transferred Assets listed in Section 2.1 as soon as practicable, which shall not be later than the Closing date.

Section 3.2 Reference Materials for Transferred Interests. To effect the transfer of ownership of the Transferred Interests to Transferee, including the Goodwill of all business connected with the use of and symbolized by the Transferred Interests, Owner shall furnish Transferee with the files and documents (if any) evidencing all Transferred Interests.

Section 3.3 Copies of Assigned Agreements. On or before the Closing date, Owner shall deliver to Transferee signed originals of the Assigned Agreements, or if any such signed original cannot be located, Owner’s best copy thereof. Owner may retain copies for archival purposes or its own use.

Section 3.4 Further Assurances. Owner agrees at Transferee’s reasonable request to execute and deliver such further conveyance agreements, and to take such further action, as may be necessary or desirable to evidence more fully the transactions described in this Agreement. Without limiting the generality of such undertaking, Owner agrees:

• (a) To execute, acknowledge and deliver any affidavits or documents of assignment and conveyance regarding the Transferred Interests;
• (b) To provide testimony and other evidence in connection with any proceeding affecting the right, title, or interest of Transferee in the Transferred Assets; and
• (c) To perform any other acts deemed necessary to carry out the intent of this Agreement.

ARTICLE IV – CONSIDERATION AND CLOSING

Section 4.1 Consideration. Transferee acknowledges and agrees that their obligations under Section 2.2 are material inducements for, and a substantial portion of, the consideration for Owner agreeing to transfer the Business and the Transferred Assets.

• (a) -- OPTIONAL -- Owner shall be entitled to _________% of the Net Annual Revenues of the Business into perpetuity, which shall be paid within 90 calendar days of the end of each calendar year. "Net Annual Revenues” means the total annual gross revenue for the applicable fiscal year minus all taxes and expenses, including all discounts, returns, cost of goods or services sold, salaries, wages, overhead and any other business expenses.

Section 4.2 Intent. It is the agreement of the parties and the intention of Owner that the Business transfer described in this Agreement shall constitute Owners’s binding obligation and shall be enforceable at law and equity, including, without limitation, against Owner and Owner's estate, heirs and personal representatives, and their successors and assignees. Owner acknowledges that Transferee has substantially relied, and shall continue to rely, on Owner’s transfer of the Business being fully satisfied as set forth herein. Owner acknowledges that the Transferee has committed substantial resources toward the assumption of the liabilities and operation of the Business.

Section 4.3 Closing. The payments and transactions contemplated by this Agreement shall be made no later than thirty (30) following the Effective Date of this Agreement or such other date as may be mutually agreed upon by the parties in writing (the "Closing”).

Section 4.4 Events Comprising the Closing. The Closing shall not be deemed to have occurred unless and until all Transferred Assets and related documents set forth herein shall have been delivered to Transferee.

ARTICLE V – WARRANTIES AND OBLIGATIONS OF OWNER

Section 5.1 No Demand for Additional Payment. Owner agrees that the consideration provided for in section 4.1 is the only compensation that Owner shall receive from Transferee. In particular, nothing contained herein shall give Owner the right to receive any additional form of payment from any of the Transferee's use of the Transferred Assets, whether in cash or product.

Section 5.2 Authority. Owner represents and warrants that they have the authority to enter into this Agreement on behalf of the Business. This Agreement has been duly and validly executed and delivered by Owner and constitutes the valid and binding agreements of Owner, enforceable against Owner in accordance with its terms.

Section 5.3 Title to Assets. Owner further warrants that it is the absolute beneficial owner of the Transferred Assets and all associated assets, with good and marketable title, free and clear of any liens, charges, encumbrances or rights of others. Owner is exclusively entitled to possess and dispose of the Transferred Assets.

Section 5.4 Preservation of Value. Owner agrees to use all reasonable business efforts to preserve the value of the Transferred Assets prior to the Closing date and will take no action that will impair the value or marketability of the Transferred Assets.

Section 5.5 Accuracy of Representations and Warranties. Owner warrants to Transferee that each of the representations and warranties made by Owner is accurate, complete and not misleading. Owner also acknowledges that the Transferee is entering into this Agreement in reliance on each such warranty and representation.

Section 5.6 Liability for Misrepresentations. In the event that Transferee has a claim against Owner relating to one or more representations or warranties made by Owner, Owner shall incur no liability to Transferee, unless and until, Transferee provides notice, in writing, to Owner that contains complete details of the claim within twenty-four (24) months of the Closing date.

ARTICLE VI – GENERAL TERMS

Section 6.1 Notice. Any notice under the terms of the Agreement may be made by a (i) written email with a required delivery receipt to sender; or by a (ii)written letter sent by regular mail, postage prepaid, registered or certified return receipt requested. Notices by email are deemed to have been received as of the time and date stamp on the delivery receipt to sender. Notices delivered by mail are deemed to have been received three (3) days after the date of mailing on the return receipt. Each party giving Notice shall address the Notice to the parties at the addresses listed in this Agreement or that may be provided by the Parties from time to time.

Section 6.2 Binding Effect; Benefits. This Agreement shall inure to the benefit of the parties hereto and shall be binding upon the parties hereto and their respective heirs, successors, and assigns. Except as otherwise set forth herein, nothing in this Agreement, expressed or implied, is intended to confer on any person, other than the parties hereto, or their respective heirs, successors, and assigns any rights, remedies, obligations, or other liabilities under, or by reason of, this Agreement.

Section 6.3 Governing Law. This Agreement shall be construed as to both validity and performance and enforced in accordance with and governed by the laws of [INSERT STATE], USA.

Section 6.4 Severability. If any term, covenant, condition, or provision of this Agreement, or the application thereof, to any circumstance shall be invalid, or unenforceable, to any extent, the remaining terms, conditions, and provisions of this Agreement shall not be affected thereby and each remaining term, covenant, condition, and provisions of this Agreement shall be valid and shall be enforceable to the fullest extent permitted by law. If any provision of this Agreement is so broad as to be unenforceable, such provisions shall be interpreted to be only as broad as is enforceable. Where any provision in this Agreement is found to be unenforceable, the Transferee and the Owner shall then make reasonable efforts to replace the invalid, or unenforceable, provision with a valid and enforceable substitute provision, the effect of which is as close as possible to the intended effect of the original invalid or unenforceable provision.

Section 6.5 Assignment. The rights and obligations of the parties under this Agreement shall not be assignable, except with the prior written consent of the other party hereto.

Section 6.6 Headings of Articles, Sections, and Subsections. The headings of Articles, Sections, and subsections used within this Agreement are included solely for the convenience and reference of the reader. They have no significance in the interpretation or construction of this Agreement.

Section 6.7 Construction of Words. Words in the singular shall include the plural and vice-versa, and words importing the masculine shall include the feminine and the neuter and vice-versa, and words importing persons shall include corporations and vice-versa.

Section 6.8 Attorney’s Fees and Costs. The prevailing party in any action shall be entitled to recover from the other party all reasonable costs and expenses so incurred, including but not limited to reasonable attorneys’ fees.

Section 6.9 Entire Agreement. This Agreement constitutes the entire Agreement between the parties and it supersedes all negotiations, preliminary agreements, and all prior and contemporaneous discussions and understandings between the parties and shall not be modified except in writing executed by the parties. The parties expressly acknowledge reading, understanding and receiving a copy of this Agreement. A facsimile copy of this Agreement and any signatures shall be considered for all purposes to be original.

IN WITNESS OF WHEREOF, the parties have executed this Agreement on the date following their signatures.

OWNER:

By: _________________________

Name:

Phone:

Email:

Date:

TRANSFEREE:

By: ________________________

Name:

Phone:

Email:

Date:

EXHIBIT A

DISCLOSURE SCHEDULE

Trademarks or Trade Names

• 1.
• 2.
• 3.

*Note all starred items are unregistered trade names

Domain Names

• 1.

Patents

• 1.

Assigned Agreements

• 1.

Business Licenses or Permits

• 1.

Other Assets

• 1.

Assumed Liabilities

• 1.