Partnership Agreement -General
_________[Name of Partnership] PARTNERSHIP
THIS GENERAL PARTNERSHIP AGREEMENT of _________[Name of Partnership], effective as of _________, _________[date], by and between _________[Name of Partner], a _________ ("_________") and _________[Name of Partner] a _________ ("_________").
The following terms used in this Agreement shall (unless otherwise expressly provided herein or unless the context otherwise requires) have the following respective meanings:
The Revised Uniform Partnership Act (1994), as may be amended from time to time.
An Affiliate of a specified Person is (i) any Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with such specified person, (ii) any Person which is an officer, director, partner (other than a partner as a result of this Agreement) or trustee of, or serves in a similar capacity with respect to, such specified Person, (iii) any Person which is directly or indirectly the owner of more than ten percent (10%) of any class of equity securities of such specified Person, and (iv) the parents, siblings, children or spouse of such specified Person.
This General Partnership Agreement as the same may be amended from time to time.
1.4. Available Cash.
That sum of cash resulting from normal business operations of the Partnership, and from any other income or funds derived from Partnership property which the Partners [Managing Partner] reasonably determine[s] to be available for distribution to the Partners after payment of all cash expenditures, including, but not limited to, to the extent applicable, taxes, principal and interest payments on all Partnership indebtedness (including loans from any of the Partners and their Affiliates to the Partnership), insurance, brokerage fees, accounting and legal fees, supplies, ordinary and necessary business expenses and the setting aside of any amounts which the Partners [Managing Partner] reasonably determine[s] are necessary as a reserve for (to the extent applicable) operating expenses, contingencies and anticipated obligations.
1.5. Capital Accounts.
A separate Capital Account shall be maintained for each Partner in accordance with the following provisions:
1.5.1 To each Partner's Capital Account there shall be credited such Partner's Capital Contributions, such Partner's distributive share of Profits, and any items of income, gain, loss deduction or credit that are specially allocated pursuant to Article VIII hereof, and the amount of any Partnership liabilities that are assumed by such Partner or that are secured by any Partnership property distributed to such Partner.
1.5.2 To each Partner's Capital Account there shall be debited the amount of cash and the fair market value of any Partnership property distributed to such Partner pursuant to any provisions of this Agreement, such Partner's distributive share of Losses, and any items in the nature of expenses or losses that are specially allocated pursuant to Article VIII hereof, and the amount of any liabilities of such Partner that are assumed by the Partnership or that are secured by any property contributed by such Partner to the Partnership.
1.5.3 In the event that the book value of the Partnership assets is adjusted pursuant to the Code, the Capital Accounts of all Partners shall be adjusted simultaneously to reflect the aggregate net adjustments as if the Partnership recognized Profit or Loss equal to the respective amounts of such aggregate net adjustments immediately before the event causing the adjustment to book value.
The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Treasury Regulations. In the event the Partners [Managing Partner] reasonably determine[s] that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto, are computed in order to comply with such Treasury Regulations, the Partners [Managing Partner] may make such modification. The Partners [Managing Partner] shall adjust the amounts debited or credited to Capital Accounts with respect to (i) any property contributed to the Partnership or distributed to a Partner, and (ii) any liabilities that are secured by such contributed or distributed property or that are assumed by the Partnership or a Partner, in the event the Partners [Managing Partner] reasonably determine[s] that such adjustments are necessary or appropriate pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv). The Partners [Managing Partner] also shall make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Treasury Regulations Section 1.704-1(b).
1.6. Capital Contribution.
The amount in cash and the value of property contributed by the Partners to the equity of the Partnership, whether initial Capital Contributions in accordance with Section 6.2 hereof or additional Capital Contributions in accordance with Section 6.3 hereof. Any reference in this Agreement to the Capital Contribution of either a Partner or any permitted assignee of a Partner includes any Capital Contribution previously made by any prior Partner to whose Partnership Interest the then existing Partner or assignee succeeded.
1.7. Cash from Sales, Financing or Condemnation.
The net cash realized by the Partnership by virtue of the sale, financing, refinancing, condemnation or disposition of the Partnership's property, in whole or in part, after repayment of applicable debt and the payment of all expenses and amounts required to be paid under the instruments evidencing or relating to such debt and all expenses related to the transaction and the retention of such amounts as the Partners [Managing Partner] may reasonably determine to be necessary as a reserve for (to the extent applicable) operating expenses, contingencies and anticipated obligations.
The Internal Revenue Code of 1986, as amended, or corresponding provisions of subsequent revenue laws.
Any cash or other property distributed to a Partner as a result of its ownership of Partnership Interests (or the assignee of a Partner's Transferable Interest as a result of its ownership of the Transferable Interest), including but not limited to distribution of Available Cash and distribution of Cash from Sales, Financing or Condemnation and distributions in complete or partial liquidation of the Partnership.
1.10. Managing Partner.
[Name of Managing Partner].
1.11. Partner or Partners.
[Name of Partner], [Name of Partner], and any substitute, successor or additional partners as provided herein.
[Name of Partnership], a [name of State] general partnership.
1.13. Partnership Interest.
All of a Partner's interest in the Partnership, including the Partner's Transferable Interest and all management and other rights.
1.14. Percentage Interest.
The percentage interest of a Partner in the Partnership's allocation of Profits, Losses, Available Cash, Cash from Sales, Financing or Condemnation and capital of the Partnership, subject to the terms and conditions of this Agreement, and as set forth opposite its name on Schedule "A" attached hereto and incorporated herein by reference.
Any individual, corporation, business trust, estate, trust, partnership, limited partnership, association, joint venture, limited liability company, governmental subdivision, agency or instrumentality or any other legal or commercial entity.
1.16. Profits or Losses.
For each fiscal year, an amount equal to the Partnership's taxable income or loss for such fiscal year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:
1.16.1 Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this Section shall be added to such taxable income or loss;
1.16.2 Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv), and not otherwise taken into account in computing Profits or Losses pursuant to this Section, shall be subtracted from such taxable income or loss;
1.16.3 To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner's interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Profits or Losses; and
1.16.4 Notwithstanding any other provisions of this Section, any items which are specially allocated pursuant to Section 8.3 hereof shall not be taken into account in computing Profits or Losses.
The amounts of the items of Partnership income, gain, loss, or deduction available to be specially allocated pursuant to Section 8.3 hereof shall be determined by applying rules analogous to those set forth in this Section.
1.17. Treasury Regulations.
Regulations of the United States Treasury Department pertaining to the income tax, as amended, and any successor provisions thereto.
1.18. Substitute Partner.
A Person who succeeds to the Partnership Interest of any Partner, by sale, exchange, assignment or otherwise, and who has been substituted for such Partner, as provided herein but does not include the transferee of a Partner's Transferable Interest.
1.19. Transferable Interest.
Only the Partner's share of Profits and Losses of the Partnership and right to receive Distributions.
FORMATION OF PARTNERSHIP
2.1. Formation and Name.
By this Agreement and pursuant to the Revised Uniform Partnership Act (1994), the Partners hereby agree to form a general partnership designated [Name of Partnership] or such other name as is approved by the Partners and such name shall be used at all times in connection with the Partnership's business and affairs. The Partners shall execute such assumed or fictitious name certificates as may be desirable or required by law to be filed in connection with the formation of the Partnership and shall cause such certificates to be filed in all appropriate public records.
The term of the Partnership shall commence on the date hereof and shall continue in existence until _________[date], unless sooner terminated as provided herein or by law.
2.3. Partnership Registration Statement.
The Partners shall execute and file with the Department of State of the State of [non-uniform State] a "Partnership Registration Statement" in the name of the Partnership in accordance with [a non-uniform statute] and amend and cancel such Partnership Registration Statement from time to time consistent with this Agreement.
BUSINESS OF THE PARTNERSHIP
The purpose and character of the business of the Partnership shall be to _________ and to engage in any and all activities related or incidental to carrying out the foregoing, and to conduct and engage in any and all activities permitted by law in furtherance of the business of the Partnership.
ADDRESS OF THE PARTIES
4.1. Principal Place of Business. The chief executive office and principal place of business of the Partnership shall be maintained at _________. The Partners may from time to time change such office and principal place of business. The Partners may establish additional places of business of the Partnership when and where required by the Partnership's business.
4.2. Partners' Addresses. The addresses of the Partners shall be those stated on Schedule "A" attached hereto and incorporated herein by reference. A Partner may change such address by written notice to the other Partners, which notice shall become effective upon receipt.
Title to all Partnership assets shall be in the name of the Partnership.
CONTRIBUTION TO CAPITAL AND STATUS OF PARTNERS
6.1. Amount of Capital.
The capital of the Partnership shall be the total amount of Capital Contributions to the Partnership by the Partners.
6.2. Initial Capital Contribution by the Partners.
Simultaneous with the execution of this Agreement, the Partners shall make the following contributions to the capital of the Partnership:
6.3. Additional Capital Contributions.
Each Partner hereby agrees that, in addition to its initial Capital Contribution under Section 6.2 hereof, it will contribute additional capital to the Partnership if the Partners determine, in their reasonable discretion, that such contributions are required to enable the Partnership to _________ as follows:
[Insert Applicable Provision Regarding Additional Capital Contributions]
Such additional capital contributions shall be made by the Partners within twenty (20) business days after written notice is received by such Partner setting forth the amount of additional capital required.
6.4. Default in Obligations To Make Additional Capital Contributions.
[Insert Applicable Default Provision Regarding Failure To Make Additional Capital Contributions]
6.5. No Assessment on Partners.
No Partner shall be assessed or be liable for additional Capital Contributions in excess of its stated initial Capital Contribution specified in Section 6.2 and any additional Capital Contributions required pursuant to Section 6.3.
6.6. Withdrawal and Return of Capital.
No Partner shall have the right to withdraw any of its capital without the consent of all the Partners, except upon dissolution and liquidation of the Partnership. Upon circumstances requiring a return of any Capital Contribution, no Partner shall have the right to receive property other than cash except as may be specifically provided herein.
6.7. Capital Accounts.
There shall be established on the books and records of the Partnership a Capital Account for each Partner. The Capital Account for each Partner shall at all times be maintained and adjusted according to the rules set forth in Section 1.704-1(b)(2)(iv) of the Treasury Regulations.
6.8. Representations and Warranties of Partners.
Each of the Partners hereby represents and warrants to the other Partners that it (a) is duly organized, validly existing and in good standing under the laws of the state of its organization; (b) has duly executed and delivered this Agreement; and (c) has full right, power and authority to execute and deliver this Agreement and to perform each of its obligations hereunder.
7.1. Distributions of Available Cash and Cash from Sales, Financing or Condemnation.
Distributions of Available Cash and Cash from Sales, Financing or Condemnation shall be made periodically at such intervals as shall be determined in the absolute discretion of the _________[Partners or Managing Partner]. Subject to the foregoing, such Distributions shall be allocated to the Partners in the following order of priority:
[Insert Applicable Provision for Distributions]
ALLOCATION OF PROFITS AND LOSSES FOR INCOME TAX AND ACCOUNTING PURPOSES
8.1. Allocation of Profits.
All Profits for accounting purposes, taxable income and gains from sales or exchanges of property (net of losses) for each fiscal year, shall be allocated, on an annual or more frequent basis as determined by the Code and Treasury Regulations promulgated thereunder, to each Partner, in the following order of priority:
[Insert Applicable Provision for Allocation of Profits]
8.2. Allocation of Losses.
All Losses, losses for accounting purposes, taxable loss and losses from sales or exchanges of property (net of gains) for each fiscal year shall be allocated, on an annual or more frequent basis as determined by the Code and Treasury Regulations promulgated thereunder, to each Partner in the following order of priority:
[Insert Applicable Provision for Allocation of Losses]
Notwithstanding the foregoing, the Losses shall be allocated among the Partners such that the Losses allocated to any Partner pursuant to this Section shall, to the extent possible, not exceed the maximum amount of Losses that can be allocated without causing such Partner to have a negative Capital Account at the end of the fiscal year.
8.3. Special Allocations.
[Insert Any Applicable Provisions for Special Allocations of Profits and Losses and Items Thereof]
8.4. 704(c) Allocations.
Any income, gain, loss or deduction with respect to property contributed to the Partnership by a Partner (as required under Code Section 704(c)) will, solely for tax purposes, be allocated among the Partners to take into account the variations between the basis of property contributed to the Partnership and the fair market value of such property in the manner provided in Code Section 704(c). Any elections or other decisions relating to such allocations shall be made by the Partners [Managing Partner] in any manner which reasonably reflects the purpose and intent of this Agreement. Allocations pursuant to this Section 8.4 shall be solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account, in computing a Partner's Capital Account or share of Profits, Losses or other items or Distributions pursuant to any provision of this Agreement.
MANAGEMENT OF THE PARTNERSHIP
9.1. Managing Partner; Rights, Power and Authority.
Subject to the limitations and provisions set forth herein, the Managing Partner shall have full, exclusive and complete authority and discretion in the management and control of the Partnership business for the purposes herein stated and shall make all decisions affecting the business of the Partnership. No other Partner shall have the rights, power or authority granted in this Section 9.1. Persons dealing with the Partnership are entitled to rely conclusively on the power and authority of the Managing Partner. Subject to the limitations and provisions set forth herein, the Managing Partner is hereby granted the right, power and authority to do on behalf of the Partnership all things which, in the Managing Partner's sole judgment and discretion, are necessary, proper, or desirable in connection with its role and function as Managing Partner of the Partnership. Further, the Managing Partner shall have all of the rights and powers of a general partner as provided in the Act and as otherwise provided by law, and any action taken by the Managing Partner permitted by this Agreement shall constitute an act of and serve to bind the Partnership.
9.2. Matters Requiring Joint Decision of the Partners.
Notwithstanding the rights, power and authority given to the Managing Partner pursuant to Section 9.1 hereof, the rights, power and authority of the Managing Partner shall not include the activities set forth in this Section 9.2 or any other provision of this Agreement requiring the consent or approval of each Partner, which shall be expressly retained for the [unanimous] decision of the Partners and shall be subject to the [unanimous] written approval of the Partners:
[Insert Any Provision Restricting Authority of Managing Partner]
9.3. Vote of Partners.
Each Partner shall have an equal vote with respect to the matters set forth in Section 9.2 hereof and all other matters requiring the approval, consent or other determination of the Partners, irrespective of the Partners' respective Percentage Interests.
9.4. Removal of Managing Partner.
_________ may be removed as the Managing Partner and _________ substituted as the Managing Partner upon _________.
[Insert Events or Conditions Requiring Removal of Managing Partner]
9.5. Duties and Obligations of the Partners.
9.5.1 The Partners shall take all actions which may be necessary or appropriate for the continuation of the Partnership's valid existence as a general partnership under the laws of the State of _________[name of state].
9.5.2 Each of the Partners shall devote to the Partnership such time as may be necessary for the proper performance of its duties hereunder. Nothing herein shall prohibit the Partners and their respective Affiliates from engaging in any other business activities during the term of the Partnership, including activities which may be competitive with the Partnership, and nothing shall give the other Partners any interest in any such competitive activities.
9.5.3 The Partners shall, in connection with the performance of their duties hereunder, comply, and shall cause the Partnership to comply, in all respects with the laws of the United States, the State of _________[name of State] and any other applicable jurisdiction, and with the rules and regulations of any governmental Person promulgated thereunder.
9.6. A Partner's Duty of Loyalty.
Each Partner agrees: (a) to account to the Partnership and hold as trustee for the Partnership any property, profit or benefit derived by such Partner in the conduct and winding up of the Partnership business or derived from a use by the Partner of Partnership property, including the appropriation of a Partnership opportunity, and (b) to refrain from dealing with the Partnership in the conduct or winding up of the Partnership business as or on behalf of a party having an interest adverse to the Partnership.
9.7. Indemnification of the Partners.
Neither of the Partners nor any of their respective Affiliates shall be liable to the Partnership or any Partner for any loss or liability incurred in connection with any act performed or omitted in accordance with the terms of this Agreement, nor for negligence, except for any loss or liability incurred in connection with the fraud, gross negligence or reckless conduct, intentional misconduct or knowing violation of the law or this Agreement of such Partner. The Partnership shall, to the fullest extent permitted by law, but only to the extent of the assets of the Partnership, and without recourse to the separate assets of the Partners, indemnify and save harmless each of the Partners from and against any and all liability, loss, cost, expense or damage incurred or sustained by reason of any act or omission in the conduct of the business of the Partnership, regardless of whether acting pursuant to its discretionary or explicit authority hereunder, except any incurred in connection with its fraud, gross negligence or reckless conduct, intentional misconduct or knowing violation of the law or this Agreement. In particular, and without limitation of the foregoing, each of the Partners shall be entitled to indemnification by the Partnership against the reasonable expenses, including attorneys' fees actually and necessarily incurred by such Partner or Affiliates, in connection with the defense of any suit or action to which such Partner or its Affiliates are made a party by reason of its position as a Partner or an affiliate of such Partner herein, to the fullest extent permitted under the provisions of this Agreement, the Act or any other applicable statute. Nothing herein shall make any affiliate of a Partner liable in any way for the acts, omissions, obligations or liabilities of a Partner.
9.8. Statement of Partnership Authority.
The Partners shall execute and file a "Statement of Partnership Authority" in the name of the Partnership pursuant to Section 303 of the Act which shall state (a) the names of the Partners authorized to execute an instrument transferring real property in the name of the Partnership, if any, and (b) the authority, or limitations on the authority of some or all of the Partners to enter into other transactions on behalf of the Partnership pursuant to Article IX of this Agreement, and any other matter. The Statement of Partnership Authority shall be filed with the Department of State of the State of _________[name of State] and in the office for recording transfers of real property in each county in which the Partnership owns real property, if any. The Partners shall amend or cancel such Statement of Partnership Authority from time to time consistent with this Agreement. Each Partner hereby agrees not to file a "Statement of Denial" pursuant to Section 304 of the Act denying any fact which would be inconsistent with the authority granted to a Partner pursuant to this Agreement.
DISPOSITION OF PARTNERSHIP INTERESTS
10.1.1 No Partner may sell, hypothecate, pledge, transfer, assign or otherwise dispose of its Partnership Interest without the prior written consent of the other Partner, which consent may be withheld in the other Partner's absolute discretion. For the purposes of this Agreement, the transfer, directly or indirectly, of fifty percent (50%) or more of the stock or other ownership interest in a Partner shall be a prohibited disposition. Notwithstanding the foregoing provisions of this Subsection 10.1.1, a Partner shall be permitted to transfer its Partnership Interest or the stock or other ownership interest in such Partner to an Affiliate of such Partner for estate planning purposes without the consent of the other Partner.
10.1.2 No offer, sale, hypothecation pledge, transfer, assignment, or other disposition of any Partnership Interest may be made unless the Partners shall have received an opinion of counsel satisfactory to them that such proposed disposition (i) may be effected without registration of the Partnership Interest under the Securities Act of 1933, as amended, (ii) would not be in violation of any securities laws (including investment suitability standards) of any jurisdiction applicable to the Partnership, and (iii) would not result in the termination of the Partnership under Code Section 708.
10.1.3 Nothing contained in this Article X shall be deemed to prohibit any Partner from transferring to any Person its Transferable Interest; provided that no such assignment of a Partner's Transferable Interest shall entitle the transferee to become a Partner, to interfere or otherwise participate in the management or conduct of the affairs or business of the Partnership, to require access to any information on account of Partnership transactions or to inspect the books and records of the Partnership. The transferee Partner's sole connection with or rights against the Partnership or any other Partner is (i) to receive, in accordance with the transfer, Distributions to which the transferor would otherwise be entitled and (ii) to receive, upon dissolution and winding up of the Partnership business, in accordance with the transfer, an account of Partnership transactions only from the date of the latest account agreed to by all of the Partners and the net amount otherwise distributable to the transferor. The transferor Partner retains the rights and duties of a Partner other than with respect to the Transferable Interest so transferred and is not relieved of its liability as a Partner under this Agreement or the Act. The Partnership shall, upon receipt of written notice of transfer of the Partner's Transferable Interest, allocate all further Profits and Losses and make all further Distributions so transferred to the transferee for such times as the Transferable Interest is transferred on the Partnership's books in accordance with this provision. The Partnership shall not give effect to the transfer of a Partner's Transferable Interest until it has received written notice of such transfer which notice shall include the name and address of the transferee and the effective date of the transfer.
10.2. Admission of Substitute Partner.
10.2.1 Subject to the other provisions of this Article X, an assignee of the Partnership Interest of a Partner (which shall be understood to include any purchaser, transferee, donee, or other recipient of any disposition of such Partnership Interest) shall be deemed admitted as a Substitute Partner of the Partnership only upon the satisfactory completion of the following:
10.2.1.1 Consent of the other Partners (which may be given or withheld in the other Partner's sole discretion) shall have been given, which consent may be evidenced by the execution by the other Partners of a certificate evidencing the admission of such person as a Partner.
10.2.1.2 The assignee shall have accepted and agreed to be bound by the terms and provisions of this Agreement by executing a counterpart thereof, and such other documents or instruments as the Partners may reasonably require in order to accomplish the admission of such person as a Partner.
10.2.1.3 If the assignee is not an individual, the assignee shall have provided the Partners with evidence satisfactory to counsel for the Partnership of its authority to become a Partner under the terms and provisions of this Agreement.
10.2.1.4 The assignee shall have paid all reasonable legal fees and administrative costs of the Partnership and the Partners and filing and publication costs in connection with its substitution as a Partner.
10.2.2 Upon the satisfactory completion of the requirements described in Section 10.2.1 for the admission of a Substitute Partner, as determined by the Partners in their reasonable discretion, a Substitute Partner shall be treated as a Partner for all purposes of this Agreement commencing the first day of the next following calendar month. Any Person so admitted to the Partnership as a Partner shall be subject to all provisions of this Agreement as if originally a party hereto but such Substitute Partner's liabilities hereunder shall commence to accrue as of the date such Substitute Partner is admitted to the Partnership. The Partnership shall, upon substitution of a Partner, pursuant to the provisions of this Section 10.2, thereafter allocate all further Profits and Losses and make all further Distributions on account of the Partnership Interest so assigned to the assignee for such time as the interest is transferred on the Partnership books in accordance with the above provisions.
10.3. Rights of Assignee of Partnership Interest of a Partner.
10.3.1 Subject to the provisions of Section 10.1 hereof, and except as required by operation of law, the Partnership shall not be obligated for any purposes whatsoever to recognize the assignment by any Partner of its Partnership Interest until the Partnership has received notice thereof, which notice must include such information and documentation with respect to the assignment as the Partners may require.
10.3.2 Any person who is the assignee of all or any portion of a Partner's Partnership Interest, but does not become a Substitute Partner, and desires to make a further assignment of such Partnership Interest, shall be subject to all the provisions of this Article X to the same extent and in the same manner as any Partner desiring to make an assignment of its Partnership Interest.
10.3.3 An assignee who has not been substituted as a Partner shall not be counted for purposes of any matter requiring the consent of the Partners.
10.4. Contravention Voids Assignment.
Any sale, hypothecation, pledge, transfer, assignment or other disposition in contravention of this Agreement shall be void and ineffective and shall not bind or be recognized by the Partnership.
DISSOCIATION OF A PARTNER
A Partner is dissociated from the Partnership upon the occurrence of any of the following events:
11.1.1 The Partnership having received written notice of the Partner's express will to immediately withdraw as a partner or withdraw on a later date specified by the Partner;
11.1.2 The Partner's expulsion by a unanimous vote of the other partners if:
184.108.40.206 It is unlawful to carry on the Partnership business with such Partner;
220.127.116.11 There has been a transfer of all or substantially all of such Partner's Transferable Interest in the Partnership other than a permitted transfer for security purposes, or a court order charging the Partner's Partnership Interest, which has not been foreclosed;
18.104.22.168 Within 90 days after the Partnership notifies a corporate Partner that it will be expelled because it has filed a certificate of dissolution or the equivalent, its charter has been revoked, or its right to conduct business has been suspended by the jurisdiction of its incorporation, there is no revocation of the certificate of dissolution or no reinstatement of the corporate Partner's charter or the corporate Partner's right to conduct business; or
22.214.171.124 A partnership that is a Partner has been dissolved and its business is being wound up;
11.1.3 On application by the Partnership or another Partner, the Partner's expulsion by judicial determination because:
126.96.36.199 The Partner engaged in wrongful conduct that adversely and materially affected the Partnership's business;
188.8.131.52 The Partner willfully or persistently committed a material breach of the Agreement or of a duty owed to the Partnership or the other Partners under Sections 9.6 or 14.5 hereof;
184.108.40.206 The Partner engaged in conduct relating to the Partnership's business which makes it not reasonably practicable to carry on the business in partnership with the Partner;
11.1.4 The Partner's:
220.127.116.11 Becoming a debtor in bankruptcy;
18.104.22.168 Executing an assignment for the benefit of creditors;
22.214.171.124 Seeking, consenting to, or acquiescing in the appointment of a trustee, receiver, or liquidator of such Partner or of all or substantially all of such Partner's property; or
126.96.36.199 Failing, within 90 days after appointment, to have vacated or have stayed the appointment of a trustee, receiver or liquidator of the Partner or of all or substantially all of the Partner's property obtained without the Partner's consent or acquiescence, or failing within 90 days after the expiration of a stay to have the appointment vacated;
11.1.5 In the case of a Partner who is an individual:
188.8.131.52 The Partner's death;
184.108.40.206 The appointment of a guardian or general conservator for the Partner; or
220.127.116.11 A judicial determination that the Partner has otherwise become incapable of performing the Partner's duties under the Agreement;
11.1.6 In the case of a Partner that is a trust or is acting as a Partner by virtue of being a trustee of a trust, distribution of the trust's entire Transferable Interest in the Partnership, but not merely by reason of the substitution of a successor trustee;
11.1.7 In the case of a Partner that is an estate or is acting as a Partner by virtue of being a personal representative of an estate, distribution of the estate's entire Transferable Interest in the Partnership, but not merely by reason of the substitution of a successor personal representative;
11.1.8 Termination of a Partner who is not an individual, partnership, corporation, trust, or estate; or
11.1.9 The Partner's direct or indirect transfer of all or any portion of its Partnership Interest in violation of Section 10.1 hereof.
11.2. Purchase of Dissociated Partner's Partnership Interest.
11.2.1 If a Partner is dissociated from the Partnership without resulting in a dissolution and winding up of the Partnership business under Section 11.1 hereof, the Partnership shall cause the dissociated Partner's Partnership Interest to be purchased for a "Buyout Price" determined pursuant to Section 11.2.2. hereof.
11.2.2 The Buyout Price of a dissociated Partner's Partnership Interest is the amount that would have been distributable to the dissociating Partner under Section 12.3.3 hereof if, on the date of dissociation, the assets of the Partnership were sold at a price equal to the greater of the liquidation value of the assets or the value of the assets based upon a sale of the entire business as a going concern without having the dissociated Partner and the Partnership wind up as of such date. Interest shall be paid from the date of the Partner's dissociation to the date of payment of the Buyout Price.
11.2.3 Damages for wrongful dissociation under Section 11.3 hereof, and all other amounts owing, whether or not presently due, from the dissociated Partner to the Partnership, shall be offset against the Buyout Price. Interest shall be paid from the date the amount owed by the dissociated Partner becomes due to the date of payment.
11.2.4 A Partnership shall indemnify a dissociated Partner whose interest is being purchased against all Partnership liabilities, whether incurred before or after the dissociation, except liabilities incurred by an act of the dissociated Partner.
11.2.5 If no agreement for the Buyout Price to be paid for the purchase of a dissociated Partner's Partnership Interest is reached within 120 days after a written demand for payment, the Partnership shall pay, or cause to be paid, in cash to the dissociated Partner the amount the Partnership estimates to be the Buyout Price and accrued interest, reduced by any offsets and accrued interest under Section 11.2.3 hereof.
11.2.6 If a deferred payment is authorized under Section 11.2.8 hereof, the Partnership may tender a written offer to pay the amount it estimates to be the Buyout Price and accrued interest, reduced by any offsets under Section 11.2.3 hereof, stating the time of payment, the amount and type of security for payment, and the other terms and conditions of the obligation.
11.2.7 The payment or tender required by Sections 11.2.5 or 11.2.6 hereof must be accompanied by the following:
18.104.22.168 A statement of Partnership assets and liabilities as of the date of dissociation;
22.214.171.124 The latest available Partnership balance sheet and income statement, if any;
126.96.36.199 An explanation of how the estimated amount of the payment was calculated; and
188.8.131.52 Written notice that the payment is in full satisfaction of the obligation to purchase unless, within 120 days after the written notice, the dissociated Partner commences an action to determine the Buyout Price, any offsets under Section 11.2.3 hereof, or other terms of the obligation to purchase.
11.2.8 A Partner who wrongfully dissociates is not entitled to payment of any portion of the Buyout Price until the expiration of the term of the Partnership or completion of the undertaking, unless the Partner establishes to the satisfaction of the court that earlier payment will not cause undue hardship to the business of the Partnership. A deferred payment must be adequately secured and shall bear interest.
11.2.9 A dissociated Partner may maintain an action against the Partnership to determine the Buyout Price of its Partnership Interest, any offsets under Section 11.2.3 hereof, or other terms of the obligation to purchase. The action must be commenced within 120 days after the Partnership has tendered payment or an offer to pay or within 1 year after written demand for payment if no payment or offer to pay is tendered. The court shall determine the Buyout Price of the dissociated Partner's Partnership Interest, any offset due under Section 11.2.3 hereof, and accrued interest, and enter judgment for any additional payment or refund. If deferred payment is authorized under Section 11.2.8 hereof, the court shall also determine the security for payment and other terms of the obligation to purchase. The court may assess reasonable attorney's fees and the fees and expenses of appraisers or other experts for a party to the action, in amounts the court finds equitable, against a party that the court finds acted arbitrarily, vexatiously, or not in good faith. The finding may be based on the Partnership's failure to tender payment or an offer to pay or to comply with Section 11.2.7.
11.3. Wrongful Dissociation.
11.3.1 Each Partner hereby agrees not to voluntarily dissociate without the consent of all of the other Partners. Accordingly, a Partner's dissociation is wrongful if, before the expiration of the term of this Agreement, the Partner:
184.108.40.206 Withdraws by express will, unless the withdrawal follows within 90 days after another Partner's dissociation under Sections 11.1.4 through 11.1.8 hereof or wrongful dissociation under this Section;
220.127.116.11 Is expelled by judicial determination under Section 11.1.3 hereof; or
18.104.22.168 Directly or indirectly transfers all or any portion of its Partnership Interest in violation of Section 10.1 hereof.
11.3.2 A Partner who wrongfully dissociates is liable to the Partnership and to the other Partners for damages caused by dissociation. This liability is in addition to any other obligation of such Partner to the Partnership or the other Partners.
11.4. Effect of Dissolution.
A Partner's right to participate in the management and conduct of the Partnership terminates upon its dissociation with the Partnership except that a Partner who has not wrongfully dissociated may, after dissolution of the Partnership, participate in winding up the Partnership's business.
11.5. Statement of Dissociation.
The Partnership shall file a "Statement of Dissociation" under Section 704 of the Act after the dissociation of a Partner. The Statement of Dissociation shall be filed with the Department of State of the State of _________[name of State] and in the Office for recording transfers of real property in each county in which the Partnership owns real property, if any.
The Partnership shall be dissolved and terminated upon the earliest to occur of the following:
12.1.1 The expiration of ninety (90) days after a Partner's dissociation under Sections 11.1.4 through 11.1.8 or by wrongful dissociation under Section 11.3, unless before such time a majority in interest of the remaining Partners agree to continue the Partnership;
12.1.2 The Partners mutually agree in writing to terminate the Partnership;
12.1.3 The expiration of the term of the Partnership;
12.1.4 The sale or other disposition of all or substantially all of the Partnership assets by the Partnership;
12.1.5 An event which makes it unlawful for all or substantially all of the business of the Partnership to be continued which is not cured within ninety (90) days after notice to the Partnership of such event; or
12.1.6 Entry of a decree of judicial determination of dissolution under the Act.
12.2. Effective Date of Dissolution.
Dissolution of the Partnership shall be effective on the earlier of _________, 19__, or the day on which the event occurs giving rise to the dissolution, but the Partnership shall not terminate until the assets of the Partnership shall have been distributed as provided in Section 12.3.3 below. Notwithstanding the dissolution of the Partnership, prior to the termination of the Partnership, as aforesaid, the business of the Partnership and the affairs of the Partners, as such, shall continue to be governed by this Agreement.
12.3. Procedure in Dissolution and Liquidation.
12.3.1 Winding up. Upon dissolution of the Partnership pursuant to Section 12.1 hereof, the Partnership shall immediately commence to wind up its affairs and the Partners shall proceed with reasonable promptness to liquidate the business of the Partnership.
12.3.2 Management Rights During Winding up. During the period of the winding up of the affairs of the Partnership, the rights and obligations of the Partners, except a Partner who has wrongfully dissociated, set forth herein with respect to the management of the Partnership shall continue. For purposes of winding up, the Partners shall continue to act as such and shall make all decisions relating to the conduct of any business or operations during the winding up period and to the sale or other disposition of Partnership assets in accordance with the terms of this Agreement.
12.3.3 Liquidation. Upon dissolution of the Partnership, the Partners, other than a Partner who has wrongfully dissociated, shall wind up the affairs of the Partnership and apply and distribute its assets or the proceeds thereof as contemplated by this Agreement. As soon as possible after the dissolution of the Partnership, a full account of the assets and liabilities of the Partnership shall be taken, and a statement shall be prepared by the independent certified public accountants then acting for the Partnership, setting forth the assets and liabilities of the Partnership. A copy of such statement shall be furnished to each of the Partners within thirty (30) days after such dissolution. Thereafter, the Partners, other than a Partner who has wrongfully dissociated, shall, in their sole and absolute discretion, either liquidate the Partnership's assets as promptly as is consistent with obtaining, insofar as possible, the fair market value thereof or determine to distribute all or part of the assets in kind. Any proceeds from liquidation, together with any assets which the Partners, other than a Partner who has wrongfully dissociated, determine to distribute in kind, shall be applied in the following order:
22.214.171.124 First, the expenses of liquidation and the debts of the Partnership. Any reserves shall be established or continued which the Partners may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the Partnership arising out of or in connection with the Partnership or its liquidation. Such reserves shall be held by the Partnership for the purpose of disbursement in payment of any of the aforementioned contingencies, and at the expiration of such period as the Partners shall deem advisable, the Partnership shall distribute the balance thereafter remaining in the manner provided in the following subdivisions of this Article; and
126.96.36.199 Then, to the Partners pro rata in accordance with the positive Capital Account balances of the Partners.
Any assets of the Partnership to be distributed in kind shall be distributed on the basis of the fair market value thereof and may be distributed to any Partner entitled to any interest in such assets as a tenant-in-common with all other Partners so entitled.
In addition, no Partner shall be required to contribute any amounts to the Partnership solely by reason of a deficit balance in such Partner's Capital Account upon liquidation of such Partner's Interest in the Partnership.
12.4. Statement of Dissolution.
After dissolution, Partners, other than a Partner who has wrongfully dissociated, shall file a Statement of Dissolution pursuant to Section 805(a) of the Act.
Upon the completion of the distribution of Partnership assets as provided in this Section 12.4, the Partners shall take such other actions as may be necessary to terminate completely the Partnership.
BOOKS AND RECORDS: REPORTS
13.1. Books and Records.
The Managing Partner shall maintain on behalf of the Partnership adequate books and records of the Partnership at the chief executive office of the Partnership, setting forth a true and accurate account of all business transactions arising out of and in connection with the conduct of the Partnership. Any Partner or its designated representative shall have the right during ordinary business hours of the Partnership to have access to and inspect and copy the contents of said books or records. The Partnership may impose a reasonable charge, covering the costs of labor and material, for copies of documents furnished.
Each Partner shall be furnished quarterly by the Partnership with (i) [annual] [unaudited] financial statements for the [fiscal year] then ended within _________ (_________) days of such [fiscal year-end], which shall be prepared in accordance with generally accepted accounting principles by an independent certified public accountant, and (ii) a report of the activities of the Partnership during the period covered by the report.
13.3. Tax Information.
Necessary tax information for the preparation of the Partners' federal income tax returns shall be delivered to the Partners on an annual basis. Every reasonable effort shall be made by the Partners to cause the Partnership to furnish such information within  days after the end of the Partnership's fiscal year. The tax returns of the Partnership shall be approved by the Partners.
13.4. Tax Election.
All tax elections on behalf of the Partnership may be made or rescinded in the discretion of the Partners, including, but not limited to, election under Section 754 of the Code on behalf of the Partnership. Adjustments available under Section 743 of the Code as a result of such election shall be taken into account by the Partners affected thereby on their individual Federal income tax returns and by the Partnership and shall not be taken into account in computing the Profits and Losses of the Partnership for purposes of this Agreement.
13.5. Tax Controversies.
Should there be any controversy with the Internal Revenue Service or any other taxing authority involving the Partnership or an individual Partner or Partners as a result of being a Partner in the Partnership, the outcome of which may adversely affect the Partnership either directly or indirectly, the Partnership may incur expenses it deems necessary and advisable in the interest of the Partnership to oppose such proposed deficiency, including, without limitation, attorneys' and accountants' fees. The Managing Partner shall act as the "Tax Matters Partner" as defined under Section 6231(a)(7) of the Code; provided, however, that all decisions relating to settling or refusing to settle any controversy with the Internal Revenue Service shall be approved by the Partners.
13.6. Fiscal Year.
The fiscal year of the Partnership for both accounting and federal income tax purposes shall be the calendar year. For accounting and federal income tax purposes, the Partnership shall report its operations and profits and losses in accordance with the method determined by the Partners.
Any notice to be given under this Agreement shall be made in writing and shall be deemed to be given when delivered by U.S. registered or certified mail, return receipt requested, or hand delivery or overnight delivery service to the party at its address. Notice may be given by telecopy provided a hard copy of such notice is mailed in accordance with this Section on the next business day following such telecopy delivery. The addresses of the Partners for this purpose shall be those stated on Schedule "A" attached hereto and incorporated herein by reference (or such other address as they shall supply for such purposes to the other parties hereto).
14.2. Governing Law; Venue.
This Agreement shall be governed and construed in accordance with the laws of the State of _________[name of State], both substantive and remedial.
14.3. Conflict with the Act.
Except as otherwise provided in Section 103(b) of the Act, in the event of any conflict between the terms of this Agreement and the Act, the terms of this Agreement shall control.
14.4. Survival of Rights.
Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the Partners and their personal representative, successors and assigns.
14.5. Dealings in Good Faith; Best Efforts.
Each Partner hereby agrees to discharge its duties to the Partnership and the other Partners under this Agreement and the Act and exercise any rights consistently with the obligation of good faith and fair dealing. Each Partner further agrees to use its best efforts to ensure that the purposes of this Agreement are realized and to take all steps as are reasonable in order to implement the operational provisions of this Agreement. Each Partner agrees to execute, deliver and file any document or instrument necessary or advisable to realize the purposes of this Agreement.
14.6. Additional Partners.
Each substitute, additional or successor Partner shall become a signatory hereof by signing such number of counterparts of this Agreement and such other instrument or instruments, and in such manner, as the Managing Partner shall determine. By so signing, each substitute, additional or successor Partner, as the case may be, shall be deemed to have adopted and to have agreed to be bound by all the provisions of this Agreement; provided, however, that no such counterpart shall be binding until the provisions of Article X hereof, as applicable, shall have been satisfied.
In the event that any provision of this Agreement shall be held to be invalid, the same shall not affect in any respect whatsoever the validity of the remainder of this Agreement.
14.8. Integrated Agreement.
This Agreement constitutes the entire understanding and agreement among the parties hereto with respect to the subject matter hereof, and there are no agreements, understandings, restrictions, representations or warranties among the parties other than those set forth herein or herein provided for.
14.9. Agreements in Counterparts.
This Agreement may be executed in several counterparts, and as executed shall constitute one Agreement, binding on all the parties hereto, notwithstanding that all the parties are not signatory to the original or to the same counterpart.
The headings, titles and subtitles used in this Agreement are inserted only for convenience of reference and shall not control or affect the meaning or construction of any of the provisions hereof.
Words of the masculine or neuter gender shall be deemed and construed to include correlative words of the masculine, feminine and neuter genders.
14.12. Attorneys' Fees.
In the event any Partner institutes legal proceedings in connection with, or for the enforcement of, this Agreement, the prevailing party shall be entitled to recover and be reimbursed its cost of arbitration and suit, including reasonable costs associated with the arbitration, attorneys' fees, paralegals' fees and legal assistants' fees, at both trial and appellate levels, from the non-prevailing party.
14.13. No Third Party Beneficiary.
Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person, firm, corporation, Partnership, association or other entity, other than the parties hereto and their respective legal representatives and permitted successors and assigns, any rights or remedies under or by reason of this Agreement.
IN WITNESS WHEREOF, the parties have executed this General Partnership Agreement on the date first above written.
PARTNERS' NAMES, ADDRESSES AND PERCENTAGE INTERESTS
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