GENERAL PARTNERSHIP AGREEMENT
GENERAL PARTNERSHIP AGREEMENT ................................................................................. 1
ARTICLE I Definitions ................................................................................................................... 1
ARTICLE II Name of Partnership ................................................................................................... 4
ARTICLE III Principal Place of Business and Principal Office of Partnership .............................. 4
ARTICLE IV Business of Partnership ............................................................................................ 4
ARTICLE V Capital Contributions; Percentages of Partnership Interest ....................................... 4
ARTICLE VI Profits and Losses ..................................................................................................... 5
ARTICLE VII Return of Capital Account ....................................................................................... 6
ARTICLE VIII Legal Title to Partnership Property ........................................................................ 6
ARTICLE IX Management of Business .......................................................................................... 7
ARTICLE X Management Services ................................................................................................ 8
ARTICLE XI Bank Accounts; Books of Account; Tax Elections .................................................. 8
ARTICLE XII Distributions ............................................................................................................ 9
ARTICLE XIII Assignability of Partnership Interest ...................................................................... 9
ARTICLE XIV Dissolution of Partnership ................................................................................... 10
ARTICLE XV Miscellaneous Provisions ...................................................................................... 14
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GENERAL PARTNERSHIP AGREEMENT
THIS GENERAL PARTNERSHIP AGREEMENT is made and entered into effective for
all purposes and in all respects as of ______________ , 20 __ by and among the undersigned
parties.
WHEREAS, the parties hereto desire to join together in a general partnership for the
purposes set forth in Article IV hereof; and
WHEREAS, the parties hereto desire to set forth in full the terms and conditions of their
agreements and understandings herein.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises set forth
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending legally to be bound, hereby agree as follows:
ARTICLE I
Definitions
1. The following terms shall have the indicated meanings ascribed to them when used
herein:
(A) "Agreement" shall mean and refer to this General Partnership’s Agreement and
Exhibit A attached hereto and made a part hereof, as amended and in effect from
time to time.
(B) "Capital Account" shall mean and refer (as of any particular date) to the Capital
Contribution of a Partner, adjusted to reflect:
(i) The Partner's distributive share of profits and losses (including, if such
date is not the close of the Partnership Accounting Year, the distributive
share of profits and losses of the Partnership for the period from the close
of the last Partnership Accounting Year to such date); and
(ii) Distributions by the Partnership to such Partner (including, if such date is
not the close of the Partnership Accounting Year, distributions by the
Partnership during the period from the close of the last Partnership
Accounting Year to such date).
(C) "Capital Contribution" or "Capital Contributions" shall mean and refer to the
amount of cash contributed to the capital of the Partnership, as reflected in Exhibit
A, as well as any additional contribution required pursuant to this Agreement.
(D) "Exhibit A" shall mean and refer to the original Exhibit A to this Agreement, as
amended and in effect from time to time.
(E) "I.R.C." shall mean and refer to the Internal Revenue Code of 1954, as amended
from time to time, or any similar Federal internal revenue law enacted in
substitution of the Internal Revenue Code of 1954, and the corresponding sections
of the revenue laws of any state or jurisdiction.
(F) "Net Cash Flow" shall mean and refer to:
(i) The taxable income of the Partnership for Federal income tax
purposes, as shown on the books of the Partnership, increased by
(a) the amount of depreciation deductions or amortization or
similar deductions in lieu thereof (including, without limitation, the
amortization of construction-period interest and real estate taxes, if
and to the extent applicable) taken in computing such taxable
income and (b) any non-taxable income or receipts of the Partner -
ship except (1) Capital Contributions and (2) the proceeds of any
mortgages or any Partnership obliga tions or loans to the extent
used to finance capital improvements and/or replacements, and
reduced by (c) payments upon the principal of any mortgages on
Partnership Property or of any other Partnership obligations or
loans, including any advances to the Partnership from Partners, (d)
expenditures for the acquisition of property and for capital
improvements and/or replacements not financed through Capital
Contributions, mortgages on Partnership Property, or any other
Partnership obligations or loans, or any reserves previously set
aside by the Partnership for such purposes, or construction-period
interest and real estate taxes and similar items attributable to the
acquisition of property or the construction of capital improvements
which are not deductible when paid, and (e) such reserves for
capital improvements and/or replacements and for repairs and
maintenance, and for security deposits or other necessary escrows
or deposits, and/or to meet anticipated expenses, as the Partners
shall deem to be reasonably necessary in the efficient conduct of
the Partnership business; plus
(ii) The net proceeds of the sale or other disposition of any part, but not all or
substantially all, of the Partnership Assets, to the extent not included in
taxable income; plus
(iii) Any other funds (including amounts previously set aside as
reserves by the Partners, where and to the extent they no longer
regard such reserves as reasonably necessary in the efficient
conduct of the Partnership business) deemed available for
distribution and designated as Net Cash Flow by the Partners.
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(G) "Partner" and "Partners" shall mean and refer to that person or persons designated
as such in Exhibit A.
(H) "Partnership" shall mean and refer to __________________ , a
__________________ general partnership, formed under and pursuant to the
Uniform Partnership Act (§ _______ through § _______ , __________________ )
and other relevant laws of the __________________ .
(I) "Partnership Accounting Year" shall mean and refer to the accounting year of the
Partnership, ending December 31 of each year unless the Partners otherwise
determine.
(J) "Partnership Assets", at any particular time, shall mean and refer to the
Partnership Property and any other assets or property (tangible or intangible,
choate or inchoate, fixed or contingent) of the Partnership.
(K) "Partnership Interest", as to any Partner, shall mean and refer to a Partner’s
Capital Account, Percentage of Partnership Interest, right to distributions under
Article XII hereof and any other rights which such Partner has in the Partnership.
(L) "Partnership Property" shall mean and refer to that certain parcel of land, located
at the ____________________________________ together with all rights,
privileges, interests, easements, improvements, hereditament and appurtenances
thereunto belonging or appertaining, and all fixtures, equipment and appliances
therein or thereat, and any additions thereto.
(M) "Percentage of Partnership Interest", as to any Partner, shall mean and refer to the
percentage in the Partnership shown opposite the name of such Partner in Exhibit
A.
(N) "Signatory Partner" shall mean and refer to that person designated as such in
Exhibit A.]
(N) (0) "Term" shall mean and refer to the period of time that the Partnership shall
continue in existence, which period of time shall begin on the date hereof and end
on __________________ , 20 __ , unless sooner terminated in accordance with the
provisions of Article XIV hereof.
2. Unless the context clearly indicates otherwise, where appropriate the singular shall
include the plural and the masculine shall include the feminine or neuter, and vice versa ,
to the extent necessary to give the terms defined in this Article I and/or the terms
otherwise used in this Agreement their proper meanings.
3. Unless otherwise specifically and expressly limited in the context, any reference herein to
a decision, determination, act, action, exercise of a right, power or privilege, or other
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procedure by the Partners shall mean and refer to such decision, determination, act,
action, exercise or other procedure by the Partners in their sole and absolute discretion.
ARTICLE II
Name of Partnership
The name of the Partnership shall be ____________________________________ .
ARTICLE III
Principal Place of Business and Principal Office of Partnership
The principal place of business of the Partnership shall be at the Partnership Property.
The principal office of the Partnership shall be located _________________________________ .
The Partnership may have such other or additional offices, either within or without the
__________________ , as the Partners shall deem advisable.
ARTICLE IV
Business of Partnership
The business of the Partnership shall consist of:
1. Acquiring, owning, leasing and operating the Partnership Property for the production of a
profit; and
2. Carrying on any and all activities related to the foregoing.
ARTICLE V
Capital Contributions; Percentages of Partnership Interest
1.
(A) Simultaneously with his execution of this Agree ment, each Partner shall be
obligated to (and does hereby covenant and agree to) contribute to the capital of
the Partnership, in cash or by good check, that sum set forth after such Partner’s
name in Exhibit A.
(B) No Partner shall be required under any circumstances to contribute to the capital
of the Partnership any amount beyond that sum required pursuant to this Article
V-l.
2.
(A) In the event that at any time (or from time to time) additional funds (in excess of
the aforesaid Capital Contributions of the Partners and proceeds from permanent
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mortgage financing of the Partnership Property) are required by the Partnership
for or in respect of its business or any of its obligations, expenses, costs, liabilities
or expenditures (including, without limitation of the generality of the foregoing,
any operating deficits), and in the further event that such funds are not required to
be contributed to the capital of the Partnership by the Partners pursuant to Article
V-l. hereof, then the Partners, acting for and on behalf of, and in the name of, the
Partnership, may use their best efforts to cause the Partnership to borrow such
required additional funds, with interest payable at then-prevailing rates, from
commercial banks, savings and loan associations and/or other lending institutions
or persons (including Partners).
(B) In the event that the Partners are unable to cause the Partnership to borrow said
required additional funds, the Partners may, but shall not be required to, lend such
funds to the Partnership. Any loans to the Partnership from the Partners shall bear
interest at the rate of one percent (1%) above the prime rate on new ninety (90)
day loans to commercial borrowers of substantial size and highest credit standing
in effect at __________________ of __________________ ,
__________________ and shall be repaid to the Partners on the terms upon which
such loans are made.
3. No interest shall accrue or be payable to any Partner by reason of his Capital
Contribution or his Capital Account.
4. The foregoing provisions of this Article V are not intended to be for the benefit of any
creditor or other person (other than a Partner in his capacity as a Partner) to whom any
debts, liabilities or obligations are owed by (or who otherwise has any claim against) the
Partnership or any of the Partners; and no such creditor or other person shall obtain any
right under any such foregoing provision against the Partnership or any of the Partners by
reason of any debt, liability or obligation (or otherwise).
ARTICLE VI
Profits and Losses
1. For bookkeeping purposes, the profits of the Partnership shall be shared, and the losses of
the Partnership shall be borne, by the Partners in proportion to their respective
Percentages of Partnership Interest.
2. For the purposes of I.R.C. Sections 702 and 704, the determination of each Partner’s
distributive share of any item of income, gain, loss, deduction, credit or allowance for any
Partnership Accounting Year or other period shall be made in accordance with and in
proportion to such Partner’s Percentage of Partnership Interest.
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ARTICLE VII
Return of Capital Account
On or after the expiration of the Term, any Partner, upon ninety (90) days, written notice
by such Partner to all other Partners, shall be entitled to the return of his Capital Account as of
the date of such notice, provided that Partnership Assets are then sufficient to cover all of the
Partnership’s liabilities, both fixed and contingent, including liabilities to Partners in respect of
their Capital Accounts. Upon any such return to a Partner of his Capital Account, other than in
dissolution of the Partnership, the Percentage of Partnership Interest of such Partner shall be
allocated among all other Partners, pro rata , in proportion to their respective Percentages of
Partnership Interest.
ARTICLE VIII
Legal Title to Partnership Property
Legal title to the Partnership Property shall be held in the name of the Partnership, or in
whatever other manner the Partners shall determine to be in the best interests of the Partnership.
Without limiting the foregoing grant of authority, the Partners may take and hold title as trustees
for and on behalf of the Partnership, or they may arrange to have title taken and held in the name
of any of them or others as trustees or nominees for and on behalf of the Partnership. Subject to
the provisions of Article IX-l, any two General Partners [the Signatory Partner], in their capacity
as Partners [his capacity as a Partner], shall have the right, power and authority (without regard
to the Term), acting for and on behalf of the Partnership, to enter into and execute any lease,
contract, agreement, deed, mortgage or other instrument or document required or otherwise
appropriate to lease, sell, mortgage, convey or refinance the Partnership Property (or any part
thereof), to borrow money and execute promissory notes, to secure the same by mortgage (which
term "mortgage" is hereby defined for all purposes of this Agreement to include deeds of trust,
financing statements, chattel mortgages, pledges, conditional sales contracts and similar security
agreements) upon the Partnership Property, to renew or extend any and all such loans or notes,
and to convey the Partnership Property in fee simple by deed, mortgage or otherwise. In no
event shall any party dealing with such Partner[s], with respect to any of the Partnership
Property, or to whom the Partnership Property (or any part thereof) shall be conveyed, contracted
to be sold, leased, mortgaged or refinanced (which term #refinanced# is hereby defined for all
purposes of this Agreement to include recast, modified, extended or increased) by such
Partner[s], be obligated to see to the application of any purchase money, rent or money borrowed
or advanced thereon, or be obligated to see that the terms of this Agreement have been complied
with, or be obligated to inquire into the necessity or expediency of any act or action of such
Partner[s], and every contract, agreement, deed, mortgage, lease, promissory note or other
instrument or document executed by such Partner[s], with respect to any of the Partnership
Property, shall be conclusive evidence in favor of any and every person relying thereon or
claiming thereunder that (a) at the time or times of the execution and/or delivery thereof, the
Partnership was in full force and effect, (b) such instrument or document was duly executed and
authorized and is binding upon the Partnership and all of the Partners thereof, and (c) such
Partner[s] (or any of them) executing and delivering the same were duly authorized and
empowered to execute and deliver any and every such instrument or document for and on behalf
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of the Partnership. It is expressly understood and agreed that the manner of holding title to the
Partnership Property (or any part thereof) and any Partnership Assets are solely for the
convenience of the Partnership. Accordingly, the spouse, heirs, executors or administrators,
beneficiaries, distributees, successors or assigns, of any Partner shall have no right, title or
interest in or to any of the Partnership Property or any Partnership Assets by reason of the
manner in which title is held; rather, the Partnership Property and any Partnership Assets shall be
subject to the terms of this Agreement.
ARTICLE IX
Management of Business
1. Management of the Partnership business shall in every respect be the full and complete
responsibility of the Partners, who shall have all rights, powers and authorities permitted
by the laws of the State of __________________ . Each of the Partners, as a Partner, shall
devote to the management of the business of the Partnership so much of his time as he, in
his sole discretion, deems reasonably necessary to efficient operation. All decisions
made for and on behalf of the Partnership by the Partners shall be binding upon the
Partnership. [It is understood and agreed that the prior approval of Partners owning one
hundred percent (100%) of the total Percentage of Partnership Interest shall be required
to do any and all acts and things necessary, proper, convenient or advisable to effectuate
the purposes of the Partnership.] [Except as expressly otherwise set forth in this
Agreement, any two of the Partners (acting for and on behalf of the Partnership), in
extension and not in limitation of the rights and powers given them by law or by the other
provisions of this Agreement, shall, in their sole discretion, have the full and entire right,
power and authority, in the management of the Partnership business, to do any and all
acts and things necessary, proper, convenient or advisable to effectuate the purposes of
the Partnership.] In furtherance and not in limitation of the foregoing provisions of this
Article IX-l and of the other provisions of this Agreement, any two of the Partners are
[the Signatory Partner is] specifically authorized and empowered to execute any and all
instruments and documents as shall be required by any lender in connection with any loan
or loans, including, but not limited to, executing any mortgage, note, contract, building
loan agreement, bank resolution and signature card, release, discharge or any other
document or instrument in any way related thereto or necessary or appropriate in
connection therewith.
2. Notwithstanding the provisions of Article IX-l hereof, it is understood and agreed that the
prior approval of Partners owning more than ____ percent ( ___ %) of the total Percentage
of Partnership Interest shall be required for: (i) the refinancing of the permanent
mortgage on the Partnership Property, or (ii) the sale, exchange or other disposition of all
or substantially all of the Partnership Assets.
3. Except as otherwise set forth herein, Partners shall not be paid any salary or other
compensation in his capacity as a Partner.
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4. Each of the Partners shall be fully and entirely reimbursed by the Partnership for any and
all out-of-pocket costs and expenses incurred by such Partner in connection with the
management and supervision of the Partnership business; provided, however, that, with
respect to any such reimbursement, such Partner shall present the Partnership with such
invoices, in such detail and with such receipts, as are necessary to substantiate such out-
of-pocket costs and expenses.
ARTICLE X
Management Services
In furtherance of the provisions of Article IX hereof, the Partners may contract with any
person, firm or corporation, including, without limitation, any of the Partners, any firm or
corporation in which any of the Partners may have an interest and/or affiliated or related
corporation or other entity, at reasonable and competitive rates of compensation, commission or
remuneration, for the performance of any and all services to be rendered to, and/or other
consideration afforded, the Partnership, which may at any time be necessary, proper, convenient
or advisable to carry on the business of the Partnership.
ARTICLE XI
Bank Accounts; Books of Account; Tax Elections
1. The funds of the Partnership shall be deposited in such separate Partnership bank account
or accounts as may be required, and the Partners shall arrange for the appropriate conduct
of such account or accounts.
2. There shall be kept at the principal office of the Partnership just, true and correct books
of account, in which shall be entered fully and accurately each and every transaction of
the Partnership. Each Partner shall have access thereto at all reasonable times. The
books shall be kept on the cash receipts and disbursements method or on accrual method
for the Partnership Accounting Year. Financial statements of the Partnership shall be
prepared for and as of the end of each Partnership Accounting Year by such independent
public accountant as the Partners may designate, and each Partner shall, not later than
seventy-five (75) days following the close of each Partnership Accounting Year, be
entitled to a copy of such financial statements. Any Partner shall further have the right to
a private audit of the books and records of the Partnership, provided such audit is made at
the expense of the Partner desiring same and is made at reasonable times after due notice.
3. If there is a distribution of any Partnership Property as described in I.R.C. Section 734,
or if there is a transfer then, upon the request of any Partner, the Partners shall cause the
Partnership to file an election under I.R.C. Section 754 to provide for an optional
adjustment to the basis of Partnership Property. Moreover, notwithstanding the possible
future applicability of the provisions of I.R.C. Section 761(a), it is understood that no
election shall be made by the Partnership or any Partner to be excluded from the
application of the provisions of Subtitle A, Chapter 1, Subchapter K of the I.R.C.
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ARTICLE XII
Distributions
1. The Net Cash Flow shall be distributed annually (or more or less frequently if the
Partners deem it advisable) among the Partners in accordance with the provisions of this
Article XII.
2. All distributions made within the Partnership Accounting Year shall be subject to
adjustment by reference to the audit report for such Partnership Accounting Year. If any
additional amount is to be distributed by reason of such audit report, such additional
amount shall be deemed a distribution for such Partnership Accounting Year; and if any
excess amount was distributed during such Partnership Accounting Year, as reflected by
such audit report, the excess amount shall be taken into account in reducing subsequent
distributions.
3. The Net Cash Flow of the Partnership shall be distributed to all Partners, pro rata , in
proportion to their respective Percentages of Partnership Interest.
4. In the event of (a) the sale, exchange or other disposition of all or substantially all of the
Partnership Property, the net proceeds therefrom, or (b) a refinancing of any mortgage on
the Partnership Property, the excess of any proceeds therefrom (that is, any refinancing
proceeds not needed for the repayment of the loan refinanced or for other Partnership
obligations or expenditures), or (c) the receipt of any excess proceeds from insurance
settlements or other claims attributable to fire or other casualty, or from partial
condemnation, sales or grants of easements, rights-of-way or the like, then, in any of such
events, the net or excess proceeds therefrom, after payment of or due provision for all
liabilities to creditors of the Partnership (including loans, if any, to the Partnership from
Partners), shall be distributed among the Partners, pro rata , in proportion to their
respective Percentages of Partnership Interest.
ARTICLE XIII
Assignability of Partnership Interest
[1.] No Partner shall have any right to sell, assign, transfer or otherwise dispose of any legal
or beneficial right, title or interest in and to his Partnership Interest; [provided, however,
that (i) the assignee agrees in writing to be bound by the provisions of this Agreement,
and (ii) the Partners unanimously so consent in writing.]
[2.] Notwithstanding any other provision of this Article XIII, neither Partner shall dispose of
any part or all of his Partnership Interest without first giving to the other Partner, at least
thirty (30) days in advance of such proposed disposi tion, written notice of his intention to
make such disposition. No such notice shall be given unless and until the Partner
desiring to make such disposition (hereinafter referred to as the #Offering Partner#) shall
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have obtained a bona fide offer in writing to purchase the Offering Partner’s Partnership
Interest. A true copy of the offer, setting forth all the terms and conditions of the
proposed purchase, with the names and addresses of the proposed purchasers, shall be
attached to such written notice. For a period of thirty (30) days from the receipt of such
written notice, such other Partner shall have the option to make the purchase from the
Offering Partner under the same terms and conditions as are set forth in such written
offer. Such option shall be exercised by giving written notice thereof to the Offering
Partner. If such notice has not been given by the expiration of the aforesaid thirty (30)
day period, the Offering Partner shall be free to make such disposition; provided,
however, that such disposition shall be made within ninety (90) days after such expiration
and in strict accordance with the terms and conditions of such bona fide offer, and shall
be subject to the provisions of Article XIII-l hereof. In the event that the Offering
Partner’s Partnership Interest is not so disposed of within said ninety (90) day period, the
provisions of this Article XIII-2 shall again be applicable and must be complied with.]
ARTICLE XIV
Dissolution of Partnership
1. [Except as provided in Article XIII hereof,] no Partner shall have the right, power or
authority at any time to withdraw or resign from the Partnership or to sell or dispose of
all or substantially all of his Partnership Interest or otherwise transfer, dispose of or affect
his Partnership Interest, whether voluntarily, involuntarily or by operation of law. Any
attempt to do so, whether voluntarily, involuntarily or by operation of law, shall cause
such Partner to become liable in damages to the other Partners therefor, as well as
subjecting such Partner to such other causes of action (and the results thereof) as are
appropriate at law or equity.
2. The Partnership shall be dissolved upon the occurrence of any of the following events:
(a) The retirement, adjudication of insanity or incompetency, death and/or
adjudication of bankruptcy of any of the Partners; provided, however, that in the
event of the retirement, adjudication of insanity or incompetency, death or
adjudication of bankruptcy of any Partner, such Partner shall remain fully and
entirely liable to the Partnership and the other Partners for any and all of its
liabilities.
(b) Whenever Partners owning at least ____ percent ( ___ %) of the total Percentage of
Partnership Interest shall determine in writing that the Partner ship shall be
dissolved.
(c) The sale of all or substantially all of the Partnership Property.
(d) The occurrence of any other event causing the dissolution of a general partnership
under the laws of the __________________ .
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(For the 2-Partner Partnership):
[3.
(A) If the dissolution of the Partnership is caused by the retirement, withdrawal,
adjudication of insanity or incompetency, death and/or adjudication of bankruptcy
of a Partner, each of the Partners (for himself and/or his committee, trustee in
bankruptcy, executors or administrators, or other legal repre sentatives) hereby
covenants and agrees that (i) the Partnership business shall continue as a sole-
proprietorship of the remaining Partner; and (ii) the Partnership Interest of the
Partner (the "Dissolving Partner") that so caused the dissolution of the Partnership
shall be purchased by and transferred to the remaining Partner for the amount and
terms of the purchase price set forth in Article XIV-3(C) below, and the
Dissolving Partner shall thenceforth have no Partnership Interest whatsoever.
[Each Partner understands that the determination of who will be a "Dissolving
Partner" at any time or times is not capable of being made at this time, but
nonetheless agrees (for himself and/or his committee, trustee in bankruptcy,
executors or administrators, or other legal representatives) on the irrevocability
and binding effect on this covenant and agreement on each of them at any and all
future times.]
(B) In the event of a dissolution of the Partnership pursuant to Article XIV-2(A)
above, each Partner (for himself and/or his committee, trustee in bankruptcy,
executors or administrators, or other legal representatives) hereby waives any and
all rights for a formal account as to the Partnership’s affairs or to wind up the
Partnership’s affairs pursuant to the Uniform Partnership Act (§ _________ ) or
any other relevant laws of the _________ .
(C) With respect to the purchase of the Partnership Interest of the Dissolving Partner
pursuant to Article XIV-3(A) above, it is understood and agreed that the amount
and terms of the purchase price shall be as mutually agreed upon by the remaining
Partner and the committee, trustee in bankruptcy, executors or administrators, or
other legal representatives of the Dissolving Partner (the #Seller#); provided,
however, that if the remaining Partner and the Seller are unable to reach such
mutual agreement, the remaining Partner and the Seller shall each promptly
appoint an appraiser to find the value of the equity of the Partnership Assets
relative to the Partnership Interest of the Dissolving Partner, for purposes of a
cash sale subject to existing encumbrances and liabilities. If the two appraisers
agree upon the equity value of the Partnership Assets relative to the Partnership
Interest of the Dissolving Partner, they shall jointly render a single written report
of their opinion thereon. If the two appraisers cannot agree upon the equity value
of the Partnership Assets relative to the Partnership Interest of the Dissolving
Partner, they shall each render a separate written report and shall together appoint
a third appraiser, who shall appraise the Partnership Assets relative to the
Partnership Interest of the Dissolving Partner, and shall render a written report of
his opinion thereon. All appraisers appointed shall be qualified by experience and
ability to appraise the Partnership Assets relative to the Partnership Interest of the
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Dissolving Partner; and the fees and other costs of each of the first two appraisers
shall be borne by the person appointing each such appraiser, with the fees and
other costs of the third appraiser being shared equally by both such persons. The
agreed equity value relative to the Partnership Interest of the Dissolving Partner or
the equity value relative to the Partnership Interest of the Dissolving Partner
contained in the aforesaid joint written report or written report of the third
appraiser, as the case may be, shall be used to determine the purchase price of the
Partnership Interest of the Dissolving Partner; provided, however, that if the value
of the equity relative to the Partnership Interest of the Dissolving Partner
contained in the appraisal report of the third appraiser is more than the higher of
the first two appraisals, the higher of the first two appraisals shall govern; and
provided, further, that if the value of the equity relative to the Partnership Interest
of the Dissolving Partner contained in the appraisal report of the third appraiser is
less than the lower of the first two appraisals, the lower of the first two appraisals
shall govern. Within sixty (60) days after the final written report (as aforesaid)
has been rendered, settlement shall be held on the purchase of the Partnership
Interest of the Dissolving Partner. Unless otherwise mutually agreed upon by the
remaining Partner and the Seller, the terms of payment of the purchase price shall
be: Twenty-nine percent (29%) cash down, with the balance of the principal
payable over a period of five (5) years in five (5) equal annual installments, with
interest payable annually at the rate of six percent (6%) per annum on the unpaid
principal balance, and with the right of prepayment in whole or in part at any time
(but not prior to January 1 of the calendar year following the calendar year in
which settlement on such sale occurs) without penalty. The obligation of the
remaining Partner to the Seller shall be evidenced by the several promissory notes
of the remaining Partner, secured by the entire Partnership Interests of the
remaining Partner.]
(For 3 or more Partner Partnership):
(A) If the dissolution of the Partnership is caused by the retirement, withdrawal,
adjudication of insanity or incompetency, death and/or adjudication of bankruptcy
of a Partner, each of the Partners (for himself and/or his committee, trustee in
bankruptcy, executors or administrators, or other legal representatives) hereby
covenants and agrees that (i) the Partnership shall not be terminated; (ii) the
Partnership and the Partnership business shall be continued; and (iii) the
Partnership Interest of the Partner (the "Dissolving Partner") that so caused the
dissolution of the Partnership shall be purchased by and transferred to the
remaining Partners ( pro rata , in proportion to their respective Percentages of
Partnership Interest, or in such other proportion as they may otherwise agree
upon) for the amount and terms of the purchase price set forth in Article XIV-
3(C) below, and the Dissolving Partner shall thenceforth have no Partnership
Interest whatsoever. [Each Partner understands that the determination of who will
be a "Dissolving Partner" at any time or times is not capable of being made at this
time, but nonetheless agrees (for himself and/or his committee, trustee in
bankruptcy, executors or administrators, or other legal representatives) on the
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irrevocability and binding effect of this covenant and agreement on each of them
at any and all future times.]
(B) In the event of a dissolution of the Partnership pursuant to Article XIV-2(A)
above, each Partner (for himself and/or his committee, trustee in bankruptcy,
executors or administrators, or other legal representatives) hereby waives any and
all rights for a formal account as to the Partnership’s affairs or to wind up the
Partnership’s affairs pursuant to the Uniform Partnership Act (§ _________
through § _________ , __________________ ) or any other relevant laws of
the _________ .
(C) With respect to the purchase of the Partnership Interest of the Dissolving Partner
pursuant to Article XIV-3(A) above, it is understood and agreed that the amount
and terms of the purchase price shall be as mutually agreed upon by the remaining
Partners and to the committee, trustee in bankruptcy, executors or administrators,
or other legal representatives of the Dissolving Partner (the #Seller#); provided,
however, that if the remaining Partners and the Seller are unable to reach such
mutual agreement, the remaining Partners, group and the Seller shall each
promptly appoint an appraiser to find the value of the equity of the Partnership
Assets relative to the Partnership Interest of the Dissolving Partner, for purposes
of a cash sale subject to existing encumbrances and liabilities. If the two
appraisers agree upon the equity value of the Partnership Assets relative to the
Partnership Interest of the Dissolving Partner, they shall jointly render a single
written report of their opinion thereon. If the two appraisers cannot agree upon
the equity value of the Partnership Assets relative to the Partnership Interest of the
Dissolving Partner, they shall each render a separate written report and shall
together appoint a third appraiser, who shall appraise the Partnership Assets
relative to the Partnership Interest of the Dissolving Partner, and shall render a
written report of his opinion thereon. All appraisals appointed shall be qualified
by experience and ability to appraise the Partnership Assets relative to the
Partnership Interest of the Dissolving Partner; and the fees and other costs of each
of the first two appraisers shall be borne by the group or person appointing each
such appraiser, with the fees and other costs of the third appraiser being shared
equally by both such group and person. The agreed equity value relative to the
Partnership Interest of the Dissolving Partner or the equity value relative to the
Partnership Interest of the Dissolving Partner contained in the aforesaid joint
written report or written report of the third appraiser, as the case may be, shall be
used to determine the purchase price of the Partnership Interest of the Dissolving
Partner; provided, however, that if the value of the equity relative to the
Partnership Interest of the Dissolving Partner contained in the appraisal report of
the third appraiser is more than the higher of the first two appraisals, the higher of
the first two appraisals shall govern; and provided, further, that if the value of the
equity relative to the Partnership Interest of the Dissolving Partner contained in
the appraisal report of the third appraiser is less than the lower of the first two
appraisals, the lower of the first two appraisals shall govern. Within sixty (60)
days after the final written report (as aforesaid) has been rendered, settlement
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shall be held on the purchase of the Partnership Interest of the Dissolving Partner.
Unless otherwise mutually agreed upon by the remaining Partners and the Seller,
the terms of payment of the purchase price shall be: Twenty-nine percent (29%)
cash down, with the balance of the principal payable over a period of five (5)
years in five (5) equal annual installments, with interest payable annually at the
rate of six percent (6%) per annum on the unpaid principal balance, and with the
right of prepayment in whole or in part at any time (but not prior to January 1 of
the calendar year following the calendar year in which settlement on such sale
occurs) without penalty. The obligation of the remaining Partners to the Seller
shall be evidenced by the several promissory notes of the remaining Partners,
secured by the entire Partnership Interests of the remaining Partners.]
[3.][4.] The Partnership shall terminate when all Partner ship Assets shall have been disposed of
(except for any liquid assets not so disposed of), and the net proceeds therefrom, as well
as any other liquid assets of the Partnership shall, after payment of or due provision for
all liabilities to creditors of the Partnership (including loans, if any, to the Partnership
from Partners), have been distributed to the Partners as provided in Article XII hereof.
ARTICLE XV
Miscellaneous Provisions
1. Except for the required Capital Contributions under Article V hereof, no Partner shall be
liable to any other Partner or to the Partnership by reason of his actions or omissions to
act in connection with the Partnership, except for actual fraud, bad faith or gross
negligence.
2. Except as provided herein, nothing herein contained shall be construed to constitute any
Partner hereof the agent of any other Partner hereof or to limit in any manner the Partners
in the carrying on of their own respective businesses or activities. Any Partner may
engage in and/or possess any interest in other business ventures of every nature and
description, independently or with others, whether existing as of the date hereof or
hereafter coming into existence; and neither the Partnership nor any Partner hereof shall
have any rights in or to any such independent ventures or the income or profits derived
therefrom.
3. Unless otherwise provided herein, any claim or controversy arising out of or relating to
this Agreement, or a breach hereof, shall, upon the request of any party involved, be
submitted to and settled by arbitration in accordance with the rules of the American
Arbitration Association (or any other form of arbitration mutually acceptable to the
parties involved) then obtaining in the ___________ . The decision make pursuant to
such arbitration shall be binding and conclusive on all parties involved; and judgment
upon such decision may be entered in the highest court of any forum, Federal or state,
having jurisdiction.
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4. All notices provided for herein shall be hand delivered, with receipt therefor, or sent by
certified or registered mail, return receipt requested, and first-class postage prepaid, to the
address of the Partner as shown on Exhibit A, unless notice of a change of address is
given to the Partnership pursuant to the provisions of this Article XV-4. Tim periods
shall commence on the date of receipt of notice as evidenced by the signed receipt
thereof. Any notice which is required to be given within a stated period of time shall be
considered timely if delivered or postmarked before midnight of the last day of such
period.
5. This Agreement sets forth all (and is intended by all parties hereto to be an integration of
all) of the promises, agreements, conditions, understandings, warranties and
representations among the parties hereto with respect to the Partnership, the Partnership
business and the Partnership Assets, and there are no promises, agreements, conditions,
understandings, warranties or representations, oral or written, express or implied, except
as set forth herein.
6. It is the intention of the parties hereto that all questions with respect to the construction,
enforcement and interpretation of this Agreement and the rights and liabilities of the
parties hereto shall be determined in accordance with the laws of the ___________ .
7. This Agreement is intended to be performed in accordance with, and only to the extent
permitted by, all applicable laws, ordinances, rules and regulations. If any provision of
this Agreement or the application thereof to any person or circumstance shall, for any
reason and to any extent, be invalid or unenforceable, the remainder of this Agreement
and the application of such provision to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest extent permitted by law.
8. This Agreement is binding upon, and inures to the benefit of, the parties hereto and their
respective spouses, heirs, executors and administrators, personal and legal
representatives, successors and (subject to the provisions of Article XIII hereof) assigns.
IN WITNESS WHEREOF, the undersigned Partners have hereunto affixed their
signatures and seals as of the day and year first above written.
WITNESS: PARTNERS:
(SEAL)
(SEAL)
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EXHIBIT A
TO
GENERAL PARTNERSHIP AGREEMENT
OF
________________________
Partners Amount of Initial
Capital
Contribution Percentage of
Partnership Interest
TOTAL $ 100.00%
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