Limited partnership for environmentally protected land development. Agreement of limited partnership made _________, 19__, between _________, _________, and _________, all of _________ county, _________(referred to as general partners), and _________, of _________, _________, of _________, and _________, of _________(referred to as limited partners). 1. Formation: The parties form a limited partnership pursuant to chapter _________ article _________ of the revised statutes of the state of _________, known as the Uniform Limited Partnership Act. 2. Certificate: The parties shall sign and swear to a certificate prepared in accordance with the provisions of the Uniform Limited Partnership Act cited above, and cause it to be filed for record in the office of the register of deeds of _________ county. 3. Name: The name of the partnership is _________. 4. Purposes: The purpose of the partnership shall be to engage in the business of buying, developing, selling and leasing real estate, particularly (but without limiting the above statement) to the end that rural acreage protected by sound ecological and environmental practices be made available on an economical basis to low and middle income families and individuals. To carry out these purposes, it is the intent of the partners that the development, sale and leasing of real estate will be done in such a manner as to protect both the social and ecological environment of the property and enhance the quality of life of persons acquiring the property as well as the owners of surrounding properties. It is recognized that this purpose will not always be consistent with maximization of profits of the partnership and, accordingly, no general partner carrying out the purposes stated shall be held accountable to the partnership or any other partner for a failure to obtain a maximum economic return from the investments of the partnership or the capital of the individual partners. 5. Place of Business: The principal place of business of the partnership shall be at _________, _________, but additional places of business may be established as the general partners shall determine. 6. Term: The partnership shall commence on _________, 19__, and shall continue until _________, 20—, unless terminated earlier as provided. 7. Capital: The initial capital of the partnership shall be $_____. Each of the partners shall contribute in cash or in property the amount set opposite his or her name. General Partners Cash Contributions Agreed Value of Property Contributions
.................................................................. $................................................................ $................................................................ ..................................................................$................................................................ $................................................................ ..................................................................$................................................................$................................................................ Limited Partners ..................................................................$................................................................ $................................................................ ..................................................................$................................................................ $................................................................ .................................................................. $................................................................ $................................................................
The property contributed is described in a separate instrument attached as exhibit A. 8. Additional Capital or Partners: The general partners shall make, and the limited partners shall each have the option of making, additional contributions to the capital of the partnership in any amount as the general partners deem necessary to carry on the business of the partnership. In each case, the contributions of the general partners shall be pro rata to their present interests in the capital of the partnership and the option of the limited partners shall be to make additional contributions at least equal to their pro rata interest in the capital of the partnership. Additional limited partners may be admitted to the partnership by unanimous written consent of the general partners. Additional general partners may be admitted to the partnership by unanimous written consent of all the general partners, and the written consent of limited partners holding interests in capital in excess of 50 percent of the capital owned by all limited partners. In each case, an appropriate amendment to the certificate of limited partnership referred to in paragraph 2 shall be made and promptly filed. 9. Capital Accounts: An individual capital account (referred to as "regular capital account") shall be maintained for each partner, to which shall be credited his or her contributions to capital and his or her share of any profits of the partnership transferred to capital and to which shall be debited his or her withdrawals from capital and his or her share of partnership losses. For purposes of adjusting the capital accounts, profits and losses shall be determined in accordance with generally accepted accounting principles on the accrual basis. In addition, an "adjusted capital account" shall be maintained for each partner. Solely for this purpose the capital account shall be credited or debited, as the case may be, with revaluation surplus or deficit from the revaluation of real property owned by the partnership as of the end of each fiscal year. At that time, the real property shall be revalued by the general partners who shall be entitled to employ whatever expert assistance they may choose in making these valuations. The valuation of the property shall not exceed the fair market value of the property, but the general partners may elect to use a lower valuation to reflect their judgment concerning the return they expect the property to produce taking into account the purposes of the partnership. 10. Drawing Accounts: An individual drawing account shall be maintained for each partner. All withdrawals made by a partner shall be charged to this drawing account. Each partner's share of profits and losses shall be credited or charged to his or her drawing account. A balance of a partner's drawing account in his or her favor (a credit balance) shall constitute a liability to that partner. It shall not constitute a part of the capital account or his or her interest in the capital of the partnership. If, after the net profit or loss of the partnership for the fiscal year has been determined, a partner's drawing account shows a deficit (a debit balance), whether occasioned by drawings in excess of his or her share of partnership profits or by charging him or her for their share of a partnership loss, the deficit shall constitute an obligation of that partner to the partnership and shall not reduce his or her capital account or his or her interest in the capital of the partnership. Payment of any amount owing to the partnership shall be made in a manner and time determined by a majority in interest of the partners. The general partners may transfer any portion of profit or loss to the partners' capital accounts at any time, provided the transfers are made proportionately to each partner's interest in capital. 11. Withdrawal of Capital: Neither a general nor a limited partner may withdraw all or any part of his or her capital contribution without the consent of all the general partners, provided that each limited partner may rightfully demand the return of all or part of his or her contribution after being given six months' notice in writing to all the other partners. Upon any withdrawal by a limited partner the certificate of limited partnership shall be amended to reflect this change in his or her capital contribution. Any partner withdrawing capital may elect to receive real property owned by the partnership in exchange for all or part of his or her partnership capital. The distributed property shall be deemed a distribution in the amount of the valuation of the property determined in accordance with the procedures set out in paragraph 9. However, the general partners may elect to
cause a revaluation of the partnership property to be distributed as of the distribution date should there be in their opinion any material change in its value since the last valuation date. Solely for purposes of determining the amount of capital available for withdrawal by way of a distribution of real property or a lease, the capital account of each partner shall be the lesser of his or her (1) adjusted capital account or (2) his or her regular capital account plus 50 percent of any excess of his or her adjusted capital account over his or her regular capital account. When real property is distributed in reduction of a partner's capital, his or her adjusted capital account shall be reduced by the value of the distributed property and his or her regular capital account shall be reduced by the amount of the property unadjusted for revaluations in accordance with paragraph 9. If a partner requests distribution of particular real property in reduction of his or her capital account, the general partners may elect to make the distribution by way of a long-term lease of property. In that case, the amount of the distribution shall be the present value of the leasehold interest, determined by the general partners in the same manner as that provided for revaluation of property in paragraph 9. The amount of capital available for withdrawal other than by a distribution of real property or a lease shall be the partners' regular capital account. In that case the adjusted capital account shall be reduced by an amount which bears the same relationship to the adjusted capital account as the amount of the distribution bears to his or her regular capital account. Should the withdrawal be accomplished by a distribution of both real property or a lease and other property, the distribution of the other property shall be deemed to be the first withdrawal without regard to the actual sequence of events. Any withdrawals by a single partner occurring within one twelve-month period shall be deemed to be a single withdrawal. 12. Profits and Losses: The net profits or losses of the partnership during each fiscal year shall be credited or debited, as the case may be, as of the close of the year to the drawing accounts of the partners in amounts proportionate to their respective adjusted capital accounts as adjusted as of the end of that year. 13. Compensation of Partners: Each of the general partners shall receive such reasonable compensation for services rendered on behalf of the partnership as shall be agreed upon by the general partners from time to time. The initial level of compensation shall be set at $_____ per hour and the initial level of reimbursement for travel by personal automobile shall be at _________ cents per mile. In addition, the partnership shall employ _________, a sole proprietorship of _________, as the exclusive agent for selling and leasing property of the partnership and reasonable compensation shall be paid to it for its services in amounts agreed upon by the general partners from time to time. The initial level of compensation in the case of sales of property shall be five percent of the selling price. The compensation shall be treated as an expense of the partnership in determining the profit or loss of the partnership. 14. Rights of General Partners: The general partners shall have the equal and sole rights in the management of the partnership business. Without limiting the generality of this authorization, this power shall include the right to hire personnel, enter into contracts, purchase, develop, sell and lease partnership property, and execute plans for the development of the property, including subjecting the property to restrictive covenants in keeping with the purposes of the partnership and incur indebtedness for partnership working capital. However, no indebtedness in excess of $_____ shall be incurred without the consent of all of the general partners and no check shall be issued by the partnership in excess of $_____ unless it is cosigned by _________ and one other general partner. The general partners shall also be entitled to execute mortgages against partnership property for the acquisition of additional real property so long as the total mortgage indebtedness of the partnership will not then exceed 400 percent of the total partnership adjusted capital accounts. 15. Time Devoted to Business: No general partner shall be required to devote all of his or her time to the business of the partnership. 16. Limitations on Powers of General Partners: No general partner shall, without the written consent or ratification of the specific act by all the other partners: a. Do any act in contravention of the certificate of limited partnership. b. Do any act which would make it impossible to carry on the ordinary business of the partnership.
c. Confess a judgment against the partnership. d. Possess partnership property, or assign their rights in specific partnership property, for other than a partnership purpose. e. Pledge or hypothecate his or her interest in the partnership, except to the parties of this agreement. 17. Accounting for the Partnership: The method of accounting to be employed for income tax purposes shall be determined by the general partners. They shall cause annual financial statements of the operations of the partnership to be prepared and kept at the partnership's principal place of business where reasonable access to the records during regular business hours of the partnership shall be given to all partners. As soon as possible after the close of the partnership taxable year, the general partners shall furnish each partner all relevant partnership information necessary for the partner to prepare his or her own personal income tax return. 18. Fiscal Year: The fiscal year of the partnership shall be the calendar year. 19. Death or Withdrawal of General Partners: If a general partner dies, becomes incapacitated, withdraws or becomes bankrupt, the partnership shall dissolve unless, within 90 days after one of these events occurs, limited partners holding interests in capital in excess of 50 percent of the total capital owned by all limited partners elect in writing to continue the partnership. If the election is made: a. The partnership shall continue until the end of the term for which it is formed or until the subsequent death, withdrawal, incapacity, or bankruptcy of a general partner, in which event the partners shall again elect whether they wish to continue the partnership operations. b. If necessary, a successor general partner or general partners who shall agree to serve shall be selected by the remaining partners. c. The incapacitated, withdrawn, or bankrupt general partner or the successor in interest of the deceased general partner shall become a limited partner with the same share of profits or losses of the partnership as before the event and shall have all the rights of a limited partner. d. All necessary steps shall be taken to amend the certificate of limited partnership. For the purposes of this section, a general partner shall be deemed to be incapacitated if he or she is disabled and unable to take an active part in the management of the partnership business for a continuous period of at least six months. For the purposes of this section, the bankruptcy of a general partner shall be deemed to have occurred when he or she is adjudicated a bankrupt under federal bankruptcy law or has executed and delivered an assignment for the benefit of his or her creditors. 20. Transfer of Limited Partner's Interest: If a limited partner dies, his or her personal representatives or other successors in interest shall have all the rights and privileges of a limited partner. If a limited partner makes any other valid transfer of all or any part of his or her interest in the partnership, the donee or assignee shall have all the rights and privileges of a limited partner with respect to that interest in the partnership. 21. Sale of Interest by General Partner: A general partner may not sell or transfer all or any part of his or her interest in the partnership, except with the written consent of the other general partners and of limited partners having a total interest in capital in excess of 50 percent of the total interest in capital of all limited partners. 22. Sale of Interest of a Limited Partner: A limited partner may sell his or her partnership interest to a general or limited partner. A limited partner may not sell all or any part of his or her partnership interest to a person who is not already a member
of the partnership, except on the following conditions: a. The interest shall first be offered in writing to the partnership at the price and on the terms on which it is proposed to be sold ("the price" and "the terms"), and the partnership shall have a period of 30 days to accept or reject the offer in whole or in part, at the price (prorated, if the offer is accepted in part) and on the terms. b. If the offer is rejected in whole or in part by the partnership, the interest or the remaining interest of the limited partner shall next be offered in writing to the other limited partners for a period of 20 days next following expiration of the 30-day period. The offer to the other limited partners shall be prorated in accordance with the ratio of the capital interests of each limited partner to the total capital interests of all the limited partners other than the one making the offer, on the terms and at prices (as to each offeree) determined by prorating the price. If not all the remaining interest is disposed of under the apportionment, each limited partner desiring to purchase a portion of the remaining interest shall be entitled to purchase the portion that remains undisposed of as his or her interest in the capital of the partnership bears to the interest in the capital of the partnership of all other limited partners desiring to purchase portions of the remaining interest. c. If none or only a portion of the interest of the limited partner desiring to sell it is purchased in accordance with subparagraphs a and b, then the limited partner may sell his or her interest or the remainder of it to a third person or third persons during the 3-month period following the expiration of the 20-day period referred to in subparagraph b, but at a price not lower than the price (prorated if only a portion), and on terms no more favorable than the terms. After the expiration of the 3-month period, no portion of the interest shall be sold without first being reoffered to the partnership and the remaining partners in accordance with subparagraphs a and b. d. Any sale or transfer or purported sale or transfer of any limited partnership interest shall be null and void unless made strictly in accordance with the provisions of this article. The transferee of any limited partner's interest in the partnership shall be subject to all the terms, conditions, restrictions, and obligations of this agreement, including the provisions of this article. Nothing here shall be construed as preventing a limited partner from making a gift of all or part of his or her interest in the partnership. 23. Transfer of Partnership Property to a Corporation: With the written consent of partners (general and limited) having a total interest in the capital of the partnership determined under paragraph 9 in excess of 50 percent, the partnership may transfer all or any part of its property to a corporation in exchange for stock of the corporation. After the transfer, the partnership may hold the stock received or may distribute it to the partners. In making any distribution of stock to the partners, the difference between the fair market value of the stock (determined by an independent appraisal of the assets of the corporation) and the value at which it is carried on the books of the partnership shall be determined, and the difference shall be credited or charged, as the case may be, to the capital accounts of the partners in the ratios of their interests in the profits or losses of the partnership. For purposes of this paragraph, a real estate investment trust shall be deemed to be a corporation. 24. Right To Dissolve the Partnership: Except as provided in paragraph 19, no partner shall have the right to cause dissolution of the partnership before the expiration of the term for which it is formed. 25. Winding Up the Partnership: In the event of a voluntary dissolution or the death, incapacity, withdrawal or bankruptcy of the general partner which is not followed by the exercise of the election of the partners to continue the partnership pursuant to paragraph 19, the partnership shall immediately commence to wind up its affairs. The partners shall continue to share profits or losses during liquidation in the same proportions as before dissolution. The proceeds from liquidation of partnership assets shall be applied as follows: a. Payment to creditors of the partnership, other than partners, in the order of priority provided by law. b. Payment to partners for loans made by them to the partnership.
c. Payment to the limited partners of the credit balances in their drawing accounts. d. Payment to the general partners of the credit balances in their drawing accounts. e. Payment to the limited partners of the credit balances in their capital accounts. f. Payment to the general partners of the credit balances in their capital accounts. 26. Gains or Losses in Process of Liquidation: Any gain or loss on disposition of partnership properties in the process of liquidation shall be credited or charged to the partners in the proportions of their interests in profits or losses. Any property distributed in kind in the liquidation shall be valued as provided in paragraph 9 and treated as though the property were sold and the cash proceeds were distributed. The difference between the value of property distributed in kind and its book value shall be treated as a gain or loss on sale of the property and shall be credited or charged to the partners in the proportions of their interests in profits or losses. 27. Election to Adjust Basis: If, in the judgment of more than one-half of the general partners, it would be to the advantage of the partnership or would be to the advantage of any partner and would not disadvantage the partnership to make or subsequently revoke the election provided by the Internal Revenue Code for an optional adjustment to the basis of property (presently contained in Section 754 of the Code), they may make or apply for revocation of election on behalf of the partnership. 28. Amendments: This partnership agreement may be amended by a written agreement executed by the general partners and a majority in interest of the limited partners. In witness, the partners have signed this agreement of limited partnership. General Partners _________ _________ _________ Limited Partners _________ _________ _________
_________ By _________