Partnership Agreement -Form to Act as one of Limited Partnership
This partnership agreement is made and entered into as of _________, 19__, by and among _________ Management Corporation, a _________ corporation, _________ and _________.
Pursuant to a proposed Plan of Reorganization and Liquidation The _________ Company, a _________ corporation, will contribute its assets, properties and business to The _________ Company (a _________ limited partnership) (the "Limited Partnership"). This Partnership is being formed to act as one of the general partners of the Limited Partnership. In consideration of the premises, the parties form a general partnership under the _________ Uniform Partnership Act on the following terms and conditions.
When used in this Agreement, the following terms shall have the meanings set forth below except as otherwise specifically modified:
1.1. "Agreement" means this Agreement, as it may be amended from time to time.
1.2. "Limited Partnership" means The _________ Company (a _________ limited partnership), its successors and assigns.
1.3. "Limited Partnership Agreement" means the Limited Partnership Agreement of the Limited Partnership, as it may be amended from time to time.
1.4. "Managing Partner" means the Person so designated pursuant to Section 5.2.
1.5. "Partners" means the parties to this Agreement and their successors as partners of the Partnership. "Partner" means any one of the Partners.
1.6. "Partnership" means the partnership created by this Agreement and any successor partnership which continues the business of this partnership and which is a reformation or reconstitution of a partnership governed by this Agreement.
1.7. "Person" means an individual, partnership, joint venture, estate, association, corporation, trust company, trust or other legal entity.
1.8. "Unit" means a unit of interest in the Limited Partnership as defined in the Limited Partnership Agreement.
2.1. Formation of the Partnership.
The Partners agree to form and by execution of this Agreement enter into a general partnership.
2.2. Name of the Partnership.
The name of the Partnership is "_________ General Partnership." This name may be changed at any time or from time to time by the Managing Partner.
2.3. Business and Purpose of the Partnership.
The business and purpose of the Partnership shall be to act as one of the general partners of the Limited Partnership, and to engage in any other related act or activity.
2.4. Principal Place of Business.
The principal place of business of the Partnership shall be at _________, _________, _________, but the Partners may establish any other place or places of business for the Partnership (within or without the State of _________) as they may deem necessary or appropriate.
The term of the Partnership shall commence upon the date first written above and shall continue until the Limited Partnership or any successor of the Limited Partnership which continues the business of the Limited Partnership is dissolved, liquidated and wound up and any trust or other entity formed for the purpose of liquidating or winding up the Limited Partnership is liquidated and wound up, unless sooner terminated pursuant to the provisions of this Agreement or in accordance with law.
POWERS AND DUTIES
The Partners shall devote such time and attention to the business of the Partnership as may be reasonably necessary to carry out their duties, but, subject to any policies adopted by the Limited Partnership, _________ Management Corporation or this Partnership, neither this Agreement nor the relationship of the parties as partners shall remove or impair the right of any Partner and its partners, directors, officers and shareholders, directly or indirectly (including, without limitation, through any entity in which the Partner or any such Person holds an ownership interest) to be otherwise employed by an entity or entities other than the Partnership on a part-time or full-time basis.
3.2. Management Power.
The Managing Partner shall have management and control of the ordinary course of the day-to-day business of the Partnership for the purposes stated in this Agreement and shall serve as tax matters partner for the Partnership. All matters outside the ordinary course of the day-to-day business of the Partnership shall be decided by a majority vote of the Partners.
3.3. Similar Activities of Partners.
Subject to any policies adopted by the Limited Partnership, _________ Management Corporation or this Partnership, the Partners and their partners, directors, officers and shareholders may, directly or indirectly (including, without limitation, through any entity in which the Partner or any such Person holds an ownership interest), engage in any and all aspects of any business in which the Partnership or the Limited Partnership is engaged or plans to engage, or any other businesses and activities, whether competitive with the Partnership or otherwise, for their own account and for the account of others, without having or incurring any obligation to offer any interest in such properties, businesses or activities to the Partnership, the Limited Partnership or any Partner, and nothing in this Agreement shall be deemed to prevent or any such Person from conducting other businesses and activities. Neither the Partnership, the Limited Partnership nor any of the Partners shall have any rights by virtue of this Agreement in any independent business ventures of that Person. However, all records kept and maintained by the Partners for the Partnership pursuant to this Agreement shall be maintained separately from those for other operations of those Persons.
3.4. Indemnification of Partners.
The Partners and their partners, shareholders, directors and officers shall each be indemnified and held harmless to the same extent as the general partners of the Limited Partnership and their partners, shareholders, directors and officers are indemnified under the Limited Partnership Agreement.
3.5. Other Matters Concerning Partners.
(A). Each of the Partners may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
(B). Each of the Partners may execute any of the powers or perform any duties listed here either directly or by or through agents, including, without limitation, partners, directors, officers, shareholders and affiliates of a Partner, the Partnership or the Limited Partnership. Each of the Partners may consult with counsel, accountants, appraisers, management consultants, investment bankers, and other consultants and advisers selected by it (who may serve as such for the Partnership or any affiliated Person) and any opinion of that Person as to matters which the Partner believes to be within its professional or expert competence shall be full and complete authorization and protection in respect to any action taken or suffered or omitted by the Partner in good faith and in accordance with that opinion. None of the Partners shall be responsible for the misconduct, negligence, acts or omissions of any such Person or of any agent or employee of the Partnership, a Partner or the Limited Partnership, nor shall any Partner assume any obligations in that connection other than the obligation to use due care in the selection of those Persons.
(C). Any and all fees, commissions, compensation and other consideration received by a Partner or a partner, director, officer or shareholder of a Partner shall be the exclusive property of the recipient, in which the Partnership shall have no right or claim, and the participation by any Person in any agreement permitted here shall not constitute a breach by that Person of any duty that it may owe the Partnership or the Partners under this Agreement or by operation of law.
CAPITAL, ALLOCATIONS AND DISTRIBUTIONS
4.1. Capital Contributions.
Each Partner shall contribute _________ Units or the right to receive _________ Units or the right to receive _________ Units to the capital of the Partnership. This contribution shall be made no later than _________ days after the record date for determining shareholders of The _________ Company, a _________ corporation, entitled to receive Units pursuant to the Plan of Reorganization and Liquidation of that corporation or the date the Person becomes a General Partner, whichever is later. No Partner shall be required to make additional contributions to the capital of this Partnership.
The Partnership shall pay all of the costs and expenses incurred by the Partners in connection with the business and affairs of the Partnership, and the Partners shall receive any other compensation as is approved by the board of directors of _________ Management Corporation.
4.3. Allocations and Distributions.
All revenue, income, expenditures, losses, credits and distributions of cash or property shall be allocated or distributed to the Partners in proportion to the number of Units contributed by them for the period or day to which the allocation or distribution pertains.
4.4. Capital Account.
A capital account shall be established for each Partner. All allocations of revenue and income shall be credited, and distributions and all allocations of expenditures, losses and credits, shall be debited to the respective capital accounts of the Partners.
4.5. No Interest or Withdrawals.
No Partner shall be entitled to interest on any capital contribution, and no Partner shall have the right to withdraw or demand the return of any or all of its capital contribution, except as specifically provided in this Agreement.
4.6. Creditor's Interest in the Partnership.
No creditor who makes a loan to the Partnership shall have or acquire at any time as a result of making the loan, any direct or indirect interest in the profits, capital or property of the Partnership other than as a creditor.
4.7. Nature of Interests.
All property owned by the Partnership, whether real or personal, tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and none of the Partners shall have any direct ownership of that property.
ADMISSION AND WITHDRAWAL
5.1. Assignment or Transfer.
No Partner shall sell, assign, transfer, mortgage, hypothecate, or encumber its interest in the Partnership, except with the written consent of _________ Management Corporation or its successor.
5.2. Partners; Managing Partner.
The Persons serving as Partners of this Partnership shall be (1) _________ Management Corporation or any successor to _________ Management Corporation or any successor to _________ Management Corporation which serves as managing general partner of the Limited Partnership pursuant to the Limited Partnership Agreement, (2) the chief executive officer of _________ Management Corporation or its successor and (3) another officer or director of _________ Management Corporation or its Successor designated by the board of directors of _________ Management Corporation or its successor. The individual who serves as a Partner by virtue of his or her position as chief executive officer of _________ Management Corporation or its successor shall be the Managing Partner. If the chief executive officer of _________ Management Corporation or its successor ceases to serve in that capacity, he or she shall cease at the same time to serve as a Partner and as Managing Partner and his or her successor as chief executive officer shall be admitted as a Partner of this Partnership and shall serve as Managing Partner of the Partnership. If the individual serving as a Partner pursuant to (3) above ceases to be an officer or director of _________ Management Corporation or its successor or the board of directors or its successor appoints another officer or director of _________ Management Corporation or its successor to serve as a Partner in his or her stead, he or she shall cease at the same time to serve as a Partner, and his or her successor shall be appointed by the board of directors of _________ Management Corporation or its successor from among its officers and directors. The successor shall be admitted as a Partner of this Partnership immediately upon his or her appointment by that board and his or her acceptance of that appointment. If _________ Management Corporation or its successor ceases to serve as a Partner, the individual Partners shall continue to serve as Partners notwithstanding anything in this Section 5.2 to the contrary until other Persons become Partners pursuant to Section 5.3.
5.3. Other Partners.
If _________ Management Corporation ceases to serve as a general partner of the Limited Partnership, then it shall cease at the same time to serve as a Partner and its successor as a general partner or the Partnership and two Persons designated by the successor shall each be admitted as a Partner of this Partnership. Any other Persons serving as Partners of the Partnership when _________ Management Corporation ceases to serve as a general partner of the Limited Partnership shall cease to serve as a Partner at the time when the successor to _________ Management Corporation is admitted as a general partner of the Limited Partnership.
5.4. Other Admission of a Partner.
Any Person admitted as a Partner other than pursuant to Sections 5.2 or 5.3 shall become a Partner only with the approval of all Partners.
5.5. Consent of Spouse.
Within 20 days after any individual becomes a Partner or the Partner marries, the Partner shall have the Partner's spouse execute a consent substantially in the form attached as Exhibit _________.
5.6. Return of Capital.
On ceasing to serve as a Partner, a former Partner shall be entitled to a return of the same number of Units (as adjusted for any Unit split, stock dividend, recapitalization or other similar change affecting the number of Units held by the Partnership) it contributed to the Partnership plus a return of any other capital contributed to the Partnership.
5.7. Capital Contribution of a New Partner.
On the admission of any Person to serve as a Partner, the Person shall contribute Units to the capital of the Partnership as provided in Article 4.
_________ Management Corporation may not withdraw as a Partner unless it no longer serves as a general partner of the Limited Partnership, this Partnership no longer serves as a general partner of the Limited Partnership or this Partnership is dissolved and its business is not continued. Any individual serving as a Partner may not withdraw except upon appointment of his or her successor by _________ Management Corporation or its successor. Except as provided in this Article 5, no Partner may withdraw from the Partnership.
5.9. Additional Partners.
The Partners agree and consent in advance that on the election or appointment of a new Partner to the Partnership, the new Partner shall, on agreeing in writing to be bound by the terms and provisions of this Agreement, and on agreeing to contribute to the capital of the Partnership of the number of Units pursuant to Section 4.1, become a party to this Agreement. If other Persons become parties to this Agreement, this Agreement will continue to be binding on every Partner without the re-execution of, or amendment to this Agreement.
BOOKS AND RECORDS
6.1. Fiscal Year and Method of Accounting.
The fiscal year of the Partnership shall be as selected by the Managing Partner, and the books of the Partnership shall be kept on any basis determined by the Partners.
6.2. Books of Account.
Complete and accurate accounts of all transactions of the Partnership shall be kept in proper books, and each Partner shall enter, or cause to be entered therein, a full and accurate account of all its transactions on behalf of the Partnership.
6.3. Inspection of Books.
The books of account and other records of the Partnership shall, at all times, be kept in the principal place of business of the Partnership, and each of the Partners shall, at all times, have access to, and may inspect and copy, any of them.
6.4. Tax Returns.
The Managing Partner shall arrange for the preparation and timely filing of all necessary tax returns for the Partnership.
TERMINATION, DISSOLUTION AND LIQUIDATION
The Partnership shall terminate on the occurrence of any event of dissolution as defined in Section 7.2.
The Partnership shall be dissolved by the occurrence of any event which under applicable law causes the dissolution of a general partnership notwithstanding an agreement to the contrary, or of any of the following events:
(a) The distribution of substantially all Partnership property;
(b) The written election of all Partners to dissolve and wind up the affairs of the Partnership which specifies the date such election shall be effective;
(c) The Partnership ceases to serve as a general partner of the Limited Partnership;
(d) The expiration of the term of the Partnership; or
(e) An event which makes it unlawful to conduct the business of the Partnership.
On the dissolution of the Partnership, no further business shall be conducted, except for taking any action as shall be necessary for the winding up of the affairs of the Partnership and the distribution of its assets to the Partners. Partnership properties may be sold, if a price deemed reasonable by the Partners may be obtained, and the proceeds as well as all other cash and properties of the Partnership shall be distributed as follows:
First, all of the Partnership's debts and liabilities to Persons other than a Partner, but excluding secured creditors whose obligations will be assumed or otherwise transferred on the liquidation of Partnership assets, shall be paid and discharged.
Second, all of the Partnership's debts and liabilities to Partners shall be paid and discharged.
Third, subject to the maintenance of a reserve for contingent liabilities as agreed by the Partners, the Partners shall receive either in cash or in kind, the amounts allocated to their respective capital accounts in accordance with this Agreement.
7.4. Distribution to Partners.
On liquidation pursuant to Section 7.3, any Units or other securities held by the Partnership shall be partitioned and the Partners shall cause appropriate certificates or evidences of ownership to be issued in the names of the Partners according to their respective interests.
7.5. No Recourse.
The Partners shall look solely to the assets of the Partnership for the payment of any income allocated to the Partners and the return of any capital contributed to the Partnership and if the assets of the Partnership remaining after payment or discharge of the debts and liabilities of the Partnership are insufficient to pay all or any part of those amounts, they shall have no recourse against any Partner, or any director, officer, shareholder, employee or agent of a Partner, the Limited Partnership or a partner of the Limited Partnership for that purpose.
All notices or other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be considered as properly given or made if personally delivered or if mailed by United States first class mail, postage prepaid and addressed to the Partner's address for notices as it appears on the records of the Partnership. Any Partner may change the address for notices, by giving notice of the change to the Partnership. Commencing on the tenth (10th) day after giving notice, the newly designated address shall be the Partner's address for the purpose of all notices or other communications required or permitted to be given pursuant to this Agreement. Any notice or other communication shall be deemed to have been given as of the date on which it is personally delivered or, if mailed, the date on which it is deposited in the United States mails.
This Agreement may be amended at any time and from time to time with the approval of _________ Management Corporation or its successor and at least one other Partner. All amendments shall be in writing and shall be signed by the Partners approving the amendment.
8.3. Choice of Law.
This Agreement and all rights and liabilities of the parties hereto with reference to the Partnership shall be subject to and governed by the laws of the State of _________ as applied to agreements solely among _________ residents to be entered into and performed entirely within _________.
8.4. Article and Section Headings.
The headings in this Agreement are inserted for convenience and identification only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any of its provisions.
8.5. Execution of Counterparts.
This Agreement may be executed in any number of counterparts with the same effect as if all parties had all signed the same document. All counterparts shall be construed together and shall constitute one agreement. Each party shall become bound by the Agreement immediately upon affixing his or her signature to it, independently of the signature of any other party.
8.6. Remedies Cumulative.
The remedies of the parties under this Agreement are cumulative and shall not exclude any other remedies to which any Person may be lawfully entitled.
No failure by any party to insist on the strict performance of any covenant, duty, agreement, or condition of this Agreement or to exercise any right or remedy consequent upon a breach shall constitute a waiver of any breach or any other covenant, duty, agreement, or condition.
Subject to the restrictions on transferability, each of the covenants, terms, provisions and agreements contained in this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the respective parties.
8.9. Gender and Number.
Whenever the context requires, the gender of all words used shall include the masculine, feminine and neuter, the singular of all words shall include the singular and plural, and the plural of all words shall include the singular and plural.
If any provision of this Agreement, or its application, shall, for any reason and to any extent, be invalid or unenforceable, the remainder of this Agreement and the application of the provision to other Persons or circumstances shall not be affected but rather shall be enforced to the maximum extent permissible under applicable law.
In witness, the undersigned have executed this Agreement as of the day and year first written above.
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