Fill and Sign the Family Partnership between Parents and Child for the Purpose of Farming Form

Family Partnership between Parent and Child for the Purpose of Farming Partnership Agreement made       , between (Date)       (the Father ) and       (Name of Parent) (Name of Child) (the Son ) of       , both of       , (Name of Parent) (Street Address)       , (collectively the Partners ). (City, County, State, Zip Code) I. Name and Purpose. The name of the Partnership shall be       and it shall be established for the purpose of (Name of Partnership) conducting the business of farming . II. Duration. The Partnership shall commence on       , and shall (Date) continue until terminated or dissolved pursuant to the provisions of this Agreement. III. Contribution. A. Father agrees to furnish to the Partnership : 1. Use of all real estate, including land, buildings, and improvement, on the farm in       , on which he now resides, listed in the (Name of County) inventory attached to this Agreement as Exhibit A; 2. Any real estate subsequently acquired by him under the provisions of Section VI; 3. The use of all farm personal property, including machinery, equipment, and livestock owned by Father on       , listed in the attached (Date) inventory; 4. Any farm personal property subsequently acquired by him under the provisions of Section VI; and 5. All or       % of t he productive time to the operation of the farm business. B. Son agrees to furnish: Family Partnership Page 1 of 6 1. The use of all farm personal property, including machinery, equipment, and livestock, owned by him on       , listed in the attached (Date) inventory; 2. Any farm personal property subsequently acquired by him under the provisions of Section VI; and 3. All or       % of t he productive time to the operation of the farm business. IV. Use of Products. A. Each of the parties to this Agreement shall be allowed products produced by the farm , for personal use by him and his family, in such quantity as may reasonably be used by him and his family. These products include       . (Description of Products) In addition, each of the parties to this Partnership Agreement shall be allowed products purchased by the farm business, for personal use by him and his family, in such quantity as may reasonably be used by his family. These products include       . (Description of Products) B. The items of food produced on the farm , household operating costs, and automobile operating costs used by each partner shall constitute a part payment by the farm for his labor on the farm and shall be paid for by the farm business. However, no additional entry shall be made in the expense columns of the farm accounts for these items when they are used by the Partners, since they have already been paid for at the time of their production or purchase, nor shall their cost or value be credited to the farm business. V. Management. The management of the Partnership shall be the joint and equal responsibility of both partners. They shall jointly determine the care of livestock, buildings, and land, the growing of crops, the management of labor, the sale of produce, and the management and expenditure of money and credit. All major decisions regarding changes in size or number of enterprises, erection of buildings, and purchase of major equipment shall, in each case, be jointly decided on by both partners. VI. Inventory. A detailed farm inventory, at values mutually agreed on by the partners, shall be made as of       by both parties to this Partnership Agreement. This (Date) inventory, attached to this Agreement, will include       . (Description of Inventory) The inventory shall show the separate ownership by one partner, or the proportionate ownership by both partners, of all items included in the inventory. During the continuance of this Agreement, the inventory shall be made annually by this same method on or about Family Partnership Page 2 of 6       of each year. (Date) VII. Exclusions from Inventory. It is agreed that the inventory taken at the beginning of the Partnership , and the annual inventories, shall not include:       (Description of Exclusions       . from Inventory) VIII. Officers. Son shall be secretary-treasurer of the Partnership . IX. Checking Account. A separate checking account shall be established at       , at       , under (Name of Bank) (Address of Bank) the name of the Partnership . All money received by the farm business for any sales or operations whatsoever, including loans received, shall be deposited by the secretary-treasurer in this checking account. All expenses incident to the operation of the Partnership , including payments on debts and all payments to the partners, shall be paid by check by the secretary-treasurer from this checking account, except that the partners may dispense money for small expenses from a revolving fund of not more than $       established and maintained by drawing money for this purpose from the checking account. X. Accounts. Son, as secretary-treasurer of the Partnership , shall keep accurate accounts of all expenses and receipts and of all transactions pertaining to the Partnership, using for this purpose, and for the inventory mentioned in Section VI, an acceptable farm accounting system. The books shall be totaled monthly and a detailed financial accounting made at the end of each year. The account books, records, and checkbooks shall be accessible to both partners at all times. XI. Devotion to Partnership. The partners shall devote their full time to the best interests of the Partnership and shall perform any and all duties required of them for the benefit of the Partnership . XII. Ownership of Items of Capital Investment. All items of capital investment contributed by either partner to the farm business remain the individual property of that partner. The farm business will, through carrying all overhead costs, maintain the investment of each partner or either partner will be reimbursed by a cash payment from the farm business for any decrease in his investment as mentioned in Section XIII. Any acquisition or improvement of items of capital investment, in addition to those required to maintain the investments of the partners, shall be shared equally between the partners. However, Father reserves the right to personally pay for increases in land and buildings, land reclamation, and major remodeling of buildings, if he so desires to maintain his ownership of most of the real estate in the Partnership . XIII. Items of Expense to be Included in Farm Business. The farm business shall pay all farm operating costs and all operating costs for outside labor and services and nonagricultural enterprises, income from which is included under farm receipts. In addition, the Partnership shall carry all overhead costs connected with the use of the capital invested in the farm and these shall Family Partnership Page 3 of 6 be entered as cash expenses. Principal payments on debts contracted by the Partnership shall be included in cash expenses. Principal payments on debts contracted by either partner prior to the formation of the Partnership will be made by that partner or through some other arrangement agreeable to both. The partners shall withdraw money from the business each week. Father shall have a salary of $       per week and S on shall have a salary of $       per week. These amounts will be entered in the farm accounts as an expense and will be predetermined jointly by the partners at the beginning of each year. However, the partners may at any time by mutual agreement adjust these amounts. The farm business shall carry certain costs connected with the health, disability, and retirement of the partners. These include:       . (Description of particulars concerning insurance, contingencies for sickness or accident, retirement, and vacations) XIV. Items of Receipts to be Included in Farm Business. All sales of       shall be included in farm receipts. All outside (Description of Goods) labor or services performed by the partners, hired labor, and equipment and receipts from all nonagricultural enterprises shall be included in farm receipts. Loans received by the farm business shall be included in cash receipts. Any unpaid balance at the end of the year shall be included in the inventory as a bill payable. The use of any money received through a loan will be agreed on, and at the end of the year any of the loan not so expended will be subtracted out of cash receipts for that year and entered as a cash receipt for the next year. The operating reserve mentioned in Section XV shall be included in receipts. XV. Division of Net Farm Income. The net farm income for any year shall be the difference between cash receipts and cash expenses. An operating reserve of $       shall be left in the business at the end of each year. This sum will be taken out of the net farm income before any other payments to the partners are made, and will be entered in the farm accounts as a receipt for the next year. If the net farm income is not sufficient to make up the above operating reserve, such money as is available will be retained in the operating reserve. From the net farm income a payment shall be made to each partner as interest for the use of his investment. The investment of each partner shall be determined at the end of the year as mentioned in Section VI, considering both assets and liabilities, and interest at       % paid to each on his investment. The remaining net farm income shall be divided so that Father receives       % and Son receives       %. If the net farm income is not sufficient to pay the total interest due the partners, such money as is available will be distributed on the basis of the proportion of the investment owned by each partner. In that event, any interest due the partners that is not paid shall be carried over to the next year and paid out of the net farm income after the operating reserve has been taken out but before there is any other division of the net farm income. XVI. Division of Farm Business. The partners agree to share all farm business losses on the same percentage basis as for the division of net farm income as mentioned in Section XV. XVII. Termination of Agreement. A. This Agreement may be terminated at any time on       days' written (Number) Family Partnership Page 4 of 6 notice from either partner, after       months' disability of either partner, or by (Number) the death of either partner. In case of the termination of this Agreement, the share of each partner in the assets and the liabilities of the farm business shall be determined as follows:       . (Description of determination of share of each partner in assets and liabilities on termination) B. In case of termination of this Agreement, the net farm income shall be determined according to the provisions of Section XV, and the net farm income shall be distributed according to the provisions of that section, except that the interest paid for the year in which the Partnership is terminated will only be for the time that has elapsed since the first of the year. Any interest due the partners for the year in which the Partnership is terminated, or any back interest that cannot be paid out of the net farm income will be paid before the equity of each partner in the business is finally determined. This will be done by adding to the equity of each partner the amount of interest due him and subtracting from his equity one half of the total interest due both partners. XVIII. Purchase of the Share of Other on Termination . I n case of the termination of this Agreement for any reason, the partner remaining in the farm business shall have the privilege of buying the share of the farm business owned by the withdrawing partner, at the inventory value determined as outlined in Section VI, in       equal annual payments, the first to be made (Number) at the time the Agreement is terminated. XIX. Severability. The invalidity of any portion of this Agreement will not and shall not be deemed to affect the validity of any other provision. If any provision of this Agreement is held to be invalid, the parties agree that the remaining provisions shall be deemed to be in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision. XX. No Waiver. The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred. XXI. Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of       . (Name of State) XXII. Notices. Unless provided herein to the contrary, any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement. XXIII. Mandatory Arbitration . Any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third Family Partnership Page 5 of 6 arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect. XXIV. Entire Agreement . This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement. XXV. Modification of Agreement. Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party. XXVI. Assignment of Rights. The rights of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation, or other entity without the prior, express, and written consent of the other party. XXVII.Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. XXVIII. Compliance with Laws. In performing under this Agreement, all applicable governmental laws, regulations, orders, and other rules of duly-constituted authority will be followed and complied with in all respects by both parties. WITNESS our signatures as of the day and date first above stated. By: By: (P rinted Name of Father) (P rinted Name of Son)             (Signature of Father) (Signature of Son) Family Partnership Page 6 of 6