Partners of a General Partnership
Document 1482A www.leaplaw.com
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BUY-SELL AGREEMENT AMONG PARTNERS OF
A GENERAL PARTNERSHIP
THIS BUY-SELL AGREEMENT (this “Agreement”) is entered into by and among
[NAME OF PARTNERSHIP] (the “Partnership”) and [NAMES OF PARTNERS], the partners
of the Partnership (the “Partners”), as of [______________, 20___].
WHEREAS, the Partnership is engaged in the business of [NATURE OF BUSINESS],
and the Partnership’s principal place of business is at [PRINCIPAL ADDRESS];
WHEREAS, as of the date hereof, each ’Partner’s percentage ownership in the
Partnership (“Percentage Interest”) is as set forth on Exhibit A hereto; and
WHEREAS, the Partners desire (1) to provide for the sale by a Partner during such
Partner’s lifetime, or by a deceased Partner’s estate, of such Partner’s interest in the Partnership,
and for the purchase of such interest by the Partnership at a price fairly established; and (2) in the
event that the Partnership elects to purchase such interest upon the death of a Partner, to provide
all or a substantial part of the funds for such purchase;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
1. Restrictions on Transfer. While this Agreement is in effect, no Partner shall have any
right to assign, encumber or dispose of his interest in the Partnership except as provided herein,
unless such transfer is to another Partner.
2. Sale to Third-Party. If a Partner (the “Transferor”) desires to withdraw from the
Partnership or to sell or otherwise dispose of any part of his interest in the Partnership (the
“Offered Interest”) during his lifetime and has received a bona fide written offer from a
prospective transferee other than any of the existing Partners (a “Third-Party Transferee”), he
shall give the Partnership and each of the other Partners written notice (the “Transfer Notice”)
of the offer. The Transfer Notice shall state the name and address of such Third-Party
Transferee and the terms and conditions of such proposed transfer.
3. Partnership Right of First Refusal. Upon receipt of the Transfer Notice, the
Partnership shall, for a period of [ ] days (the “Partnership Option Period”), have the right,
but not the obligation, to purchase all or any portion of the Offered Interest for a purchase price
(“Purchase Price”) equal to the price offered by the Third-Party Transferee on the terms and
conditions set forth in the Transfer Notice.
4. Partners’ Secondary Right of First Refusal. If the Partnership fails to purchase the
entire Offered Interest within the Partnership Option Period, the other Partners shall have an
additional [ ] days (the “Partner Option Period”) within which to purchase the Offered
Interest for the Purchase Price. Each Partner shall individually have the right to purchase that
percentage of the Offered Interest which is equal to the percentage of the Partnership, exclusive
of the Offered Interest, already owned by such Partner (such Partner’s “Pro Rata Share”) at a
price equal to such Partner’s Pro Rata Share of the Purchase Price. Each Partner shall have a
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right of over-subscription so that if any Partner (a “Declining Partner”) fails to purchase his full
Pro Rata Share within the Partner Option Period, each other Partner who so notified the
Partnership of its interest in doing so shall have the right to purchase its Pro Rata Share of any
unsold portion of the Offered Interest for the same price as would have been paid by the
5. Partnership Payment. If the Partnership elects to purchase the Offered Interest or a
portion thereof, it shall pay for the Offered Interest or such portion in cash on the date of sale.
6. Partner Payment. If any Partner elects to purchase the Offered Interest or a portion
thereof during the Partner Option Period, such Partner shall have the right to pay for the purchase
in installments upon the terms set forth in Exhibit B hereto (the “Note Terms”) (or upon any
more favorable terms offered to the Third-Party Transferee as stated in the written notice).
7. Transfer to Third-Party. If neither the Partnership nor the other Partners, in the
aggregate, purchases the entire Offered Interest pursuant to Section 3 through Section 6 of this
Agreement upon expiration of the Partner Notice Period, the Transferor may, within [ ] days of
such expiration, dispose of the Offered Interest or any remaining portion thereof to the Third-
Party Transferee at the price and upon the terms and conditions described in the Transfer Notice,
provided that the agreement establishing the Partnership does not further restrict or prevent such
sale or other disposition. Any other proposed disposition of the Offered Interest or any portion
thereof to any person other than an existing Partner, whether by the Transferor or any Third-
Party Transferee acquiring such interest, shall be again subject to the first refusal procedure set
forth in Section 2 through Section 6 of this Agreement.
8. No Further Profits to Transferor. After any sale of the Offered Interest or any portion
thereof, the capital and contributions accounts of the Transferor shall become the capital and
contributions accounts of the transferee, , and the Transferor shall not participate in any
Partnership profits attributable to the Offered Interest.
9. List of Partnership Interests. Any change in the respective ownership interest of the
Partners shall be promptly recorded in Exhibit A attached hereto.
10. Life Insurance.
(a) To assure that all or a substantial part of the purchase price of a deceased
Partner’s interest will be available in cash upon his death, the Partnership has purchased
insurance on the lives of the Partners as described on Exhibit C attached hereto, in each case
naming the Partnership as sole beneficiary.
(b) The Partnership may, from time to time, procure additional policies on the
Partners’ lives to effectuate this Agreement. It may also release policies from the Agreement;
increase, decrease or make other changes in existing policies; or substitute other life insurance
policies on the same life or lives for any policies subject to this Agreement. The Partners hereby
agree to do all things necessary or desirable to enable the Partnership to obtain additional
insurance on their lives or make changes in existing policies.
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(c) The Partnership shall apply for and be the owner and one-sum primary
beneficiary of all life insurance policies subject to this Agreement and shall pay the premiums on
all such policies as they fall due. The Partnership may apply policy dividends to the payment of
premiums. Proof of premium payments shall be furnished by the Partnership whenever a Partner
requests such proof. If the Partnership fails to pay a premium within [ ] days after it falls due,
the insured shall have the right to pay such premium and to be reimbursed therefor by the
(d) So long as this Agreement remains in effect it is expressly agreed that the
Partnership shall exercise none of the rights or privileges granted to it as owner by the terms of
the policies (such as the right to borrow upon, surrender for cash, change the beneficiary, or
assign a policy) except with the written consent of all the Partners.
(e) Any additional policies or other changes affecting the insurance under this
Agreement shall be recorded in Exhibit C and at all times the provisions of this Agreement shall
extend to all policies recorded in Exhibit C.
(f) The insurance company identified in Exhibit C (the “Insurance Company”) is
not a party to this Agreement. Notwithstanding any provisions in this Agreement to the contrary,
the Insurance Company is expressly authorized to act in accordance with the terms of its polices
as though this Agreement did not exist, and the payment or other performance of its contractual
obligations in accordance with the policy terms shall completely discharge the Insurance
Company from all claims, suits and demands of all persons whatsoever.
(g) Each Partner shall have the right to purchase from the Partnership any insurance
policy or policies on his life which are subject to this Agreement (i) upon withdrawing
completely from the Partnership during his lifetime; or (ii) upon the termination of this
Agreement during his lifetime. This right of purchase shall be exercised as to each policy by
paying to the Partnership, in cash, an amount equal to the cash surrender value as defined in the
policy, adjusted to the date of transfer of ownership of the policy to the purchaser. The right of
purchase shall lapse if it is not exercised within [_ _] days after occurrence of the event giving
rise to the right of purchase.
11. Death of a Partner. Upon the death of a Partner, such Partner’s estate shall sell, and the
Partnership shall purchase, such Partner’s entire interest in the Partnership for the price and upon
the other terms provided in this Agreement. The procedure upon the death of a Partner shall be
(a) The Partnership, as beneficiary of the applicable life insurance policy or policies
recorded in Exhibit C, shall promptly file claims to collect in cash the one-sum death claim
proceeds of all such policies.
(b) Upon the collection of such proceeds and the qualification of a personal
representative for the deceased Partner, the Partnership shall pay over to the personal
representative an amount equal to the full proceeds collected, in part or in full payment for the
deceased Partner’s interest in the Partnership.
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(c) The Partnership shall determine the fair market value of the deceased Partner’s
interest. The fair market value shall be determined and approved unanimously by all Partners in
consultation with the Partnership’s independent accountants. In the event that all Partners do not
agree on the fair market value of the deceased Partner’s interest, the Partnership shall engage an
independent Chartered Financial Analyst (“ICFA”) to make such determination. In the event
that any Partner (or the estate of the deceased Partner) dissents from the determination of the
ICFA within [ ] days of receiving such determination, such party shall have the option to
engage its own ICFA to make a separate determination. If the fair market values determined by
the two ICFAs differ by 10% of the higher value or less, the final fair market value for the
interest shall be the average of the two values. If the fair market values determined by the two
ICFAs differ by more than 10% of the higher value, the two ICFAs shall mutually select a third
ICFA to choose one of the two values provided by the first two ICFAs as the final fair market
value. In determining the fair market value, the excess of the death claim proceeds over the cash
values of the insurance policies on the deceased Partner’s life which are subject to this
Agreement at the time of his death shall not be taken into account.
(d) If the one-sum death proceeds of all the policies on the deceased Partner’s life are
less than the fair market value of his interest as determined above, the Partnership shall either
pay the balance forthwith in cash, or in lieu of such cash payment shall execute and deliver to the
personal representative of the deceased Partner an unsecured promissory note (the “Note”) of
equal amount, payable to his order, subject to the Note Terms.
(e) The personal representative of the deceased Partner shall promptly execute (and
shall cause any other party whose signature may be necessary to transfer a complete title to the
deceased Partner’s interest to execute) and, concurrently with receipt of the full purchase price
for the deceased Partner’s interest (either in cash, or in cash and a Note, as provided above), shall
deliver all instruments necessary to transfer the deceased Partner’s interest to the Partnership, as
of the date of the deceased Partner’s death. The transfer of such interest shall be made free and
clear of all taxes and security interests.
(f) Concurrently with the transfer to the Partnership of the deceased Partner’s
interest, the surviving Partners shall execute and deliver to the personal representative of the
deceased Partner an instrument or instruments by which the surviving Partners guarantee all the
debts and obligations of the Partnership and indemnify the deceased Partner’s estate against all
Partnership liabilities and any and all claims by the surviving Partners or by the Partnership’s
(g) The Partners expressly agree that upon the death of any Partner, the Partnership
shall continue without interruption unless a majority in interest of the surviving Partners vote to
terminate the Partnership within [ ] days of the death of such Partner.
12. Termination. This Agreement shall terminate upon:
(a) the written agreement of the Partnership and all the Partners;
(b) the dissolution of the Partnership other than by the death of a Partner;
(c) the death of all Partners simultaneously, or within a period of [ ] days; or
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(d) upon the death of the last surviving Partner or Partners at any time before the
purchase and sale under this Agreement of the interest of any other Partner to die.
13. Further Assurances. The Partnership, the Partners, the personal representative of any
deceased Partner, and all other parties bound by this Agreement shall promptly execute and
deliver any and all papers or instruments necessary or desirable to carry out the provisions of this
14.1 Governing Law. This Agreement will be construed in accordance with and
governed by the laws of the [STATE], without giving effect to the conflict of law principles of
14.2 Successors and Assigns. Except as otherwise expressly provided in this
Agreement, this Agreement will be binding on, and will inure to the benefit of, the successors
and permitted assigns of the parties to this Agreement. Nothing in this Agreement is intended to
confer upon any party other than the parties hereto or their respective successors and assigns any
rights or obligations under or by reason of this Agreement, except as expressly provided in this
14.3 Notices. All notices and other communications required or permitted hereunder
will be in writing and will be delivered by hand or sent by overnight courier, fax or e-mail to:
if to [NAME OF PARTY]:
with a copy to:
[insert other recipients as appropriate]
Each party may furnish an address substituting for the address given above by giving notice to
the other parties in the manner prescribed by this Section 14.3. All notices and other
communications will be deemed to have been given upon actual receipt by (or tender to and
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rejection by) the intended recipient or any other person at the specified address of the intended
14.4 Severability. In the event that any provision of this Agreement is held to be
unenforceable under applicable law, this Agreement will continue in full force and effect without
such provision and will be enforceable in accordance with its terms.
14.5 Construction. The titles of the sections of this Agreement are for convenience of
reference only and are not to be considered in construing this Agreement. Unless the context of
this Agreement clearly requires otherwise: (a) references to the plural include the singular, the
singular the plural, and the part the whole, (b) references to one gender include all genders, (c)
“or” has the inclusive meaning frequently identified with the phrase “and/or,” (d) “including” has
the inclusive meaning frequently identified with the phrase “including but not limited to” or
“including without limitation,” and (e) references to “hereunder,” “herein” or “hereof” relate to
this Agreement as a whole. Any reference in this Agreement to any statute, rule, regulation or
agreement, including this Agreement, shall be deemed to include such statute, rule, regulation or
agreement as it may be modified, varied, amended or supplemented from time to time.
14.6 Disputes. Any controversy, claim or dispute arising out of or relating to this
Agreement, shall be settled by binding arbitration in [CITY/STATE]. Such arbitration shall be
conducted in accordance with the then prevailing commercial arbitration rules of [NAME OF
ARBITRATOR], with the following exceptions if in conflict: (a) one arbitrator shall be chosen
by [ARBITRATOR]; (b) each party to the arbitration will pay its pro rata share of the expenses
and fees of the arbitrator, together with other expenses of the arbitration incurred or approved by
the arbitrator; and (c) arbitration may proceed in the absence of any party if written notice
(pursuant to the Arbitrator’s rules and regulations) of the proceeding has been given to such
party. The parties agree to abide by all decisions and awards rendered in such proceedings.
Such decisions and awards rendered by the arbitrator shall be final and conclusive and may be
entered in any court having jurisdiction thereof as a basis of judgment and of the issuance of
execution for its collection. All such controversies, claims or disputes shall be settled in this
manner in lieu of any action at law or equity, provided however, that nothing in this subsection
shall be construed as precluding brining an action for injunctive relief or other equitable relief.
The arbitrator shall not have the right to award punitive damages or speculative damages to
either party and shall not have the power to amend this Agreement. IF FOR ANY REASON
THIS ARBITRATION CLAUSE BECOMES NOT APPLICABLE, THEN EACH PARTY, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELTING TO
THIS AGREEMENT OR ANY OTHER MATTER INVOLVING THE PARTIES HERETO
14.7 Entire Agreement. This Agreement embodies the entire agreement and
understanding among the parties hereto with respect to the subject matter of this Agreement and
supersedes all prior or contemporaneous agreements and understandings other than this
Agreement relating to the subject matter hereof.
14.8 Amendment and Waiver. This Agreement may be amended only by a written
agreement executed by all of the parties hereto. No provision of this Agreement may be waived
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except by a written document executed by the party entitled to the benefits of the provision. No
waiver of a provision will be deemed to be or will constitute a waiver of any other provision of
this Agreement. A waiver will be effective only in the specific instance and for the purpose for
which it was given, and will not constitute a continuing waiver.
14.9 Counterparts. This Agreement may be in any number of counterparts, each of
which will be deemed an original, but all of which together will constitute one instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Buy-Sell Agreement as of
the date first written above.
[NAME OF PARTNERSHIP]
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