Model multiclass partnership agreement. The Partnership shall report all items of income, gain, loss, deduction, or credit in accordance with the provisions of this Agreement and the Internal Revenue Code as amended ("Code"). II. Agreement The Partners agree as follows: Section 1. Operative Language 1.01. The words and phrases in quotation marks in Section 2 have the meanings indicated. Whenever the words and phrases defined in Section 2 or elsewhere in this Agreement are intended to have their defined meanings, the first letter of the word or the first letters of all substantive words in the phrase shall be capitalized. Otherwise, any word or phrase that appears in this Agreement shall have the meaning denoted by its context. 1.02. When the context permits, a word or phrase used in the singular includes the plural, and when used in any gender, it also includes all genders. 1.03. Captions of sections are inserted as a matter of convenience only, and do not define, limit, or extend the scope or intent of this Agreement or any of its provisions. 1.04. The paragraphs under the heading "I. Recitals and Representations" are made a part of this Agreement. Section 2. Definitions 2.01. "Accountant" means the firm of _________ or any other independent public accountant whom the Partnership shall periodically designate. 2.02. "Accounting Basis" means the cash receipts and disbursements method provided in Section 446(c)(1) of the Code, which generally requires that in the computation of taxable income, all items which constitute gross income, whether in the form of cash, property, or services, are to be included for the Accounting Year in which they were actually or constructively received, and expenditures are to be deducted for the Accounting Year in which they were actually made. 2.03. "Accounting Year" means the period beginning _________ and ending _________ of any year. 2.04. "Agreement" means this Agreement and any amendments made in accordance with Section 3.05. 2.05. "Bank" means the _________ or such other commercial bank as the Partnership shall periodically designate. 2.06. "Distributive Share" means a Holder's distributive share of income, gain, loss, deduction, or credit, as further defined in Section 704 of the Code. 2.07. "Execution Date" refers to the date when this Agreement was signed by the last party to sign.
2.08. "Guaranteed Payments" refers to payments to a Partner or Holder for the use of capital, determined without regard to the income of the Partnership. 2.09. "Holder" means any Person who owns an Interest, whether or not that Person is a Partner. 2.10. Unless otherwise required by the context, "Interests" refers to all Preferred and Common Partnership Interests, being units into which the proprietary interest of the Partnership is divided. 2.11. "Interest Rate" means the local prime interest rate applicable to the Partnership at the Bank, but in no event less than _________ per cent simple interest per Accounting Year. 2.12. "Liquidation Preference" means, with respect to any Preferred Interest, _________ dollars. 2.13. "Liquidation Price" means, with respect to any Preferred Interest, the Liquidation Preference of that Interest, plus any Guaranteed Payments which have accrued and are unpaid as of the relevant date. 2.14. "Net Profit and Loss" means the Accounting Basis gross receipts of the Partnership, less the ordinary and necessary expenses attributable to the business of the Partnership, including, without limitation, utilities, insurance management fees, supplies, professional fees, and Guaranteed Payments. 2.15. "Option Interests" means the Partnership Interests that a Transferor proposes to Transfer. 2.16. "Parties" refers to the Partners and all Holders collectively. 2.17. "Partner" means the Persons named and identified as such in the introductory portion of this Agreement and any Holder who has been admitted to the Partnership. 2.18. "Partnership" means the relationship established by the Partners among themselves and evidenced by this Agreement. 2.19. "Partnership Termination" means a voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Partnership. 2.20. "Permitted Holder" refers to all Partners and their respective descendants, whether natural born or adopted, including a trustee for the benefit of a Person. 2.21. "Person" means an individual, partnership, corporation, unincorporated organization, or a government and any of its departments or agencies. 2.22. "Preferred Creditor" means any person holding an unpaid note. 2.23. "Prime Rate" means _________ and it shall be increased as of the end of each Accounting Year as follows: i As promptly as practicable after the end of each Accounting Year, the Partnership shall compute the increase, if any, in the cost of living for the preceding Accounting Year based upon the Revised Consumers Price Index for Urban Wage Earners and Clerical Workers published by the Bureau of Labor Statistics of the United States Department of Labor; ii The Index number for the month of January _________ indicated in the column for the City of
_________ entitled "all items" shall be the "base Index number," and the corresponding Index number for December 31 of the referent Account Year shall be the "current Index number"; iii The current Index number shall be divided by the base Index number. From that quotient there shall be subtracted the integer 1, and any resulting positive number shall be deemed to be the percentage of increase in the cost of living; and iv The percentage of increase multiplied by two per cent (2%) shall be the increase required to be determined by this Section. 2.24. "Property" means all real estate or personal property contributed to the Partnership, all additions, accessions, or substitutions and all real estate or personal property, other than cash, accounts receivable, or inventory, acquired by the Partnership. 2.25. "Transfer" means a disposition by will, intestate succession, for value, by gift, by operation of law, or otherwise. 2.26. "Transferee" means a Person to whom a Transferor proposes to Transfer Partnership Interests. 2.27. "Transferor" means a Holder or a Holder's executor, administrator, personal representative, or successor in interest who proposes to Transfer Partnership Interests. Section 3. Functions, Records, and Amendments 3.01. The Partnership shall commence on _________ and shall continue until terminated as provided. 3.02. The Partnership shall engage in the business of _________ and related activities ("Business") in _________ or such other or additional locations as the Partnership shall periodically determine ("Partnership Office"). 3.03. The books and records of the Partnership shall be maintained on the Accounting Basis applied consistently, and shall operate on the Accounting Year. The books and records shall be open to the reasonable inspection and examination of any Partner or Preferred Creditor or their duly authorized representatives during reasonable business hours. 3.04. All Partnership funds shall be maintained in the Bank. All withdrawals may be made upon checks signed by any Partner. 3.05. This Agreement may be amended by the affirmative vote of a majority of the Partners. However, no amendment may change the relative rights, preferences, privileges, and restrictions of the several classes of Interests without the unanimous written consent of all Partners holding Partnership Interests of the class to be affected. All amendments shall be evidenced by a writing identified as an amendment to this Agreement and signed by the Partners who shall have agreed to the amendment. Section 4. Partnership Interests 4.01. The Partnership shall have the authority to issue _________ Partnership Interests, divided into two classes as follows: The Interests and their Holders shall have the rights, preferences, privileges, and restrictions noted below. The Partnership may not issue Interests to any Person who is not a Partner, however, a Transferee to whom Interests are Transferred shall be treated as a Holder
even if the Transferee is not admitted to the Partnership as a Partner. 4.02. The Partnership shall issue an instrument evidencing the fact that the Person named is the holder of record of the Partnership Interest. 4.03. The Holders of Preferred Interests shall be entitled to receive annual Guaranteed Payments equal to an amount computed by multiplying the Liquidation Preference of the Holder's Preferred Interests by the Prime Rate. Except as provided below, Guaranteed Payments less amounts withdrawn under Section 7.02 shall be made on or before the due date, plus extensions, of the Partnership's federal income tax return. Interest shall not accrue with respect to any Guaranteed Payments except as provided below. If the Partnership is insolvent, the payment of Guaranteed Payments would cause the Partnership to become insolvent, or the Holders of Preferred Interests who are Partners unanimously agree that the payment of Guaranteed Payments would cause damage to the Partnership's Business, the Partnership may withhold payment of Guaranteed Payments for up to 12 months after the date that these Payments are due to be made. If any Payments are withheld, interest, calculated at the Interest Rate, shall accrue to the withheld Payments, and, until the withheld Payments, plus interest, are paid in full, no distribution or withdrawal of property or cash shall be made to or by any Holder of a Common Interest other than for salary, interest, rent, or other payment to a Person in a capacity other than that of a Partner or Holder. 4.04. In the event of a Partnership Termination, the Holders of Preferred Interests shall be entitled to receive out of the assets of the Partnership and prior to any distribution in respect of any other class of Interests an amount of money equal to the Liquidation Price payable in respect of each Preferred Interest on the date of commencement of the Partnership Termination. If, upon Partnership Termination, the assets distributable among the Holders of Preferred Interests are insufficient to permit the payment of the full Liquidation Price in respect of all Preferred Interests, then all distributable assets of the Partnership shall be distributed among the Holders of Preferred Interests in the ratio that the number of Preferred Interests held by a Holder bears to the total number of Preferred Interests issued and outstanding. Notwithstanding the above, if any Preferred Holder's capital account is impaired, as defined in Section 6.03, the amount otherwise distributable to that Holder shall be reduced by the amount of the capital impairment. 4.05. The Holders of Common Interests shall not be entitled to receive any Guaranteed Payments. 4.06. In the event of a Partnership Termination, subject to all of the preferential rights of the Holders of Preferred Interests, the Holders of Common Interests shall be entitled to receive, ratably, all of the remaining assets of the Partnership available for distribution. Notwithstanding the above, if any Common Holder's capital account or income account is impaired, as defined in Sections 6.04 and 6.05, the amount otherwise distributable to that Holder shall be reduced by the amount of capital impairment. Section 5. Participation in Net Profits and Losses 5.01. Any Net Profit of the Partnership for any Accounting Year shall be divided among the Holders of Common Interests in the ratio that the number of Common Interests a Holder owns bears to the aggregate number of Common Interests issued and outstanding. 5.02. Any Net Loss of the Partnership for any Accounting Year shall be divided among all Holders of Interests in the ratio that the Liquidation Preference of each Preferred Interest and the Adjusted Value, as defined in Section 10.02, of each Common Interest owned by each Holder bears to the aggregate Liquidation Preference and Adjusted Value of all Preferred and Common Interests issued and outstanding.
5.03. A Holder's Distributive Share of items of income, gain, loss, deduction, or credit separately enumerated in paragraphs 1 through 7 of Section 702(a) of the Code, and of taxable income referred to in paragraph 8 of said Section 702(a), shall be determined in the same manner that Partnership Net Profits are divided. The Distributive Shares of net taxable losses, referred to in paragraph 8 of said Section 702(a), shall be determined in the same manner that Partnership Net Losses are divided. Section 6. Capital and Income Accounts 6.01. A separate capital account shall be maintained for each Holder. It shall consist of any capital contributions made with respect to the Interests owned by the Holder, increased by any amounts credited to the capital account in respect to such Interests under Section 6.03 or 6.04 and decreased by any distributions or withdrawals properly credited to the Holder's capital account in reduction of Partnership capital in respect of such Interests. In the case of Partners who are Holders of Preferred Interests, the amount of capital contributed to the Partnership in exchange for each Preferred Interest shall be equal to the Liquidation Preference of each Preferred Interest received. Except as otherwise provided in Sections 7.02 and 7.04, no Holder shall withdraw any portion of his or her capital account without prior written approval of all Partners. 6.02. Notwithstanding the provisions of Section 6.01, in the event that any partner [or unit holder, etc.] receives an adjustment, allocation or distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) that would result in that partner having a negative balance in his, her or its capital Account in excess of the portion of the negative balance that he, she or it is obligated to restore to the Partnership (treating for this purpose, the Partner's share of the Partnership's Minimum Gain as equivalent to an obligation to restore a deficit balance), this Partner shall be allocated items of Partnership gross income or gain in an amount and manner sufficient to eliminate the negative balance as promptly as possible. It is the intention of the parties that the allocations pursuant to this Section constitute a qualified income offset as that term is defined in Treasury Regulation Section 1.704-1(b)(2)(ii)(d). 6.03. If, at the end of any Accounting Year, the capital account of a Holder of a Preferred Interest is less than the aggregate Liquidation Preference of Preferred Interests held by that Holder, the Holder's capital account shall be deemed to be impaired. In that event, the Guaranteed Payments which become payable to the Holder under Section 4.03 shall first be credited to the Holder's capital account to the extent necessary to eliminate the impairment. 6.04. If, at the end of any Accounting Year, the capital account of a Holder of a Common Interest is less than zero, that Holder's capital account shall be deemed to be impaired. In that event, any balance in the Holder's income account shall be credited to the Holder's capital account to the extent necessary to eliminate the impairment. If the balance credited does not eliminate the impairment, then the Appraised Value of Partnership Property is determined as provided in Section 10.03 and shall be reflected as the value of Partnership Property on the financial statements of the Partnership. Any increase in Partnership net worth thus produced shall be allocated to the capital accounts of all Holders of Common Interests in the ratio that the number of Common Interests owned by a Holder bears to the aggregate number of Common Interests issued and outstanding. If this revaluation of Property does not eliminate any capital impairment with respect to a Holder of a Common Interest, then, until the impairment has been eliminated, the Holder's share of Partnership Net Profit shall first be credited to his or her capital account before any Net Profit is allocated to their income account. 6.05. An income account shall be maintained for each Holder of Common Interests, consisting of his or her share of Partnership Net Profit, increased by payments made under Section 6.06 and decreased by withdrawals under Sections 7.03 and 7.04 and by his or her share of Partnership Net Losses. A credit balance in a Holder's income account shall not constitute a part of his or her interest
in the Partnership. A Common Holder's share of Partnership Net Losses shall be charged to his or her income account before any charge is made to the capital account. However, losses shall not be charged to the income account to the extent that they would reduce the balance of that account below zero. 6.06. If, at the end of any Accounting Year, the income account of any Holder of Common Interests is below zero, this debit balance shall constitute an obligation of the Holder to the Partnership, payable on demand and bearing interest at the Interest Rate. This debit balance shall not reduce the Holder's capital account. Section 7. Drawing Accounts 7.01. At the option of any Preferred Holder, a drawing account shall be established. At the end of each calendar month, the drawing account of Holder shall be credited with an amount equal to onetwelfth of the Guaranteed Payment payable with respect to each Preferred Interest for the current year, in the case of the first Accounting Year, and with respect to the second and succeeding Accounting Years, the amount payable with respect to the immediately preceding Accounting Year, multiplied by the number of Preferred Interests owned by the Holder at the end of that month. 7.02. Subject to the limitations in Section 4.03 and the right of the Partnership to limit or bar any withdrawal of funds that are reasonably needed to meet the current or reasonably anticipated cash requirements of the Partnership, a Preferred Holder may withdraw the credit balance of the drawing account. If the capital account of a Preferred Holder is impaired within the meaning of Section 6.03, no withdrawal may be made until the impairment is eliminated. For this purpose, amounts otherwise credited to the Holder's drawing account under Section 7.01 shall be first credited to the capital account. 7.03. At the option of any Common Holder, a drawing account shall be established after the First Accounting Year. At the end of each calendar month, the drawing account of this Holder shall be credited with an amount equal to one-twelfth of the amount of Net Profit allocable to each Common Interest for the immediately preceding Accounting Year, multiplied by the number of Common Interests owned by the Holder at the end of that month. 7.04. Subject to the limitations in Section 4.03 and the right of the Partnership to limit or bar any withdrawal of funds that are reasonably needed to meet the current or reasonably anticipated cash requirements of the Partnership, any Common Holder may withdraw the credit balance of their drawing account. He or she may also withdraw, within a reasonable time after the close of the Accounting Year and subject to the right of the Partnership to limit or bar any withdrawal of funds that are reasonably needed to meet the current or reasonably anticipated cash requirements of the Partnership, the credit balance of the income account. However, if the capital account of the Holder is impaired within the meaning of Section 6.04, no withdrawals may be made until the impairment is eliminated. For this purpose, amounts otherwise credited to the Holder's drawing account under Section 7.03 shall be first credited to the capital account. Section 8. Voting Rights and Management Duties 8.01. Control of the Partnership and all of its affairs shall be in the Partners, each of whom shall have one vote. Except as otherwise provided Partnership decisions shall be made by a majority vote. If not present, any Partner may vote on any matter by general or specific written proxy or by specific written instruction. 8.02. A Partner who renders services to the Partnership shall be entitled to reasonable compensation as may be determined by the Partnership without regard to the Net Profit and Loss of
the Partnership. 8.03. No Partner shall make, draw, accept, or endorse any bill of exchange, promissory note, or other engagement for the payment of money for or on behalf of the Partnership or guarantee any debt or account on behalf of the Partnership without the prior written consent of all the other partners, except in the course of the Business of the Partnership. 8.04. No Partner shall voluntarily cause the sale or mortgage of substantially all of the assets of the Partnership or the dissolution of the Partnership without the unanimous consent of all Partners. Section 9. Restrictions upon the Transfer of Interests 9.01. Except with respect to a Transfer by a Permitted Holder to a Permitted Holder, no Transferor may Transfer all or any portion of his or her Interests to any Person without transmitting an Offer to both the Partnership and the Partners with respect to the Interests or any portion that the Transferor proposes to Transfer. "Offer" means a written undertaking of a Transferor specifying all of the following: i His or her intention to Transfer; ii The number or portion of any Partnership Interests that he or she proposes to Transfer; iii The name, address and telephone number of the proposed Transferee; iv The price that the Transferee proposes to pay the Transferor for each Interest or portion and all other terms and conditions of the proposed Transfer; and v The undertaking of the Transferee that he or she will execute a counterpart of this Agreement if the Option Interests are transferred to him or her, and that the Option Interests are being acquired for investment and not with a view toward their redistribution. 9.02. Within 30 days after the receipt of the Offer, the Partnership may purchase all or a portion of the Option Interests at the purchase price per Interest stated in the Offer. If the Partnership fails to purchase the Option Interests, then each Partner may, within forty-five (45) days after receipt of the Offer and at the Purchase Price per Interest stated, purchase the number of the Common Option Interests that is equivalent to the ratio which his or her Common Interests bear to the Common Interests owned by all Partners other than the Transferor, and the number of Preferred Option Interests that is equivalent to the ratio which his or her Preferred Interests bear to the Preferred Interests owned by all Partners other than the Transferor. 9.03. If any Partner declines to purchase any portion of the Option Interests available the other Partners may purchase the number of the Common Option Interests that is equivalent to the ratio which the declining Partner's Common Interests bear to the Common Interests owned by the Partners purchasing the Option Interests, and the number of Preferred Option Interests that is equivalent to the ratio which the declining Partner's Preferred Interests bear to the Preferred Interests owned by the Partners purchasing the Option Interests. 9.04. If any of the Option Interests offered by the Transferor are not purchased by the Partnership or by Partners who hold the same class of Partnership Interests, as provided for above, each Partner who holds the other class of Partnership Interests may purchase the number of the Option Interests in the ratio which the number of Interests owned by that Partner bears to the number of Interests owned by Partners purchasing Option Interests under this Section.
9.05. To the extent that neither the Partnership nor the other Partners purchase the Option Interests, the Transferor may transfer the Option Interests to the Transferee if the Transferee executes a counterpart of this Agreement. The Transferee may, at the option of all the remaining Partners, be admitted as a Partner in accordance with such procedures and on such terms and conditions as a majority of the remaining Partners shall promulgate. 9.06. Upon the death of a Holder ("Trigger Event"), the Partnership shall, with respect to a Holder who was a Permitted Holder and the subject of a Trigger Event, repurchase the Permitted Holder's Interests if tendered to the Partnership within 150 days after the occurrence of the Trigger Event. With respect to any other Holder who was the subject of a Trigger Event, the Partnership may repurchase all Interests owned by that Holder. Any Transferee with respect to any Interests not repurchased may, at the option of all the remaining Partners, be admitted as a Partner in accordance with such procedures and on such terms and conditions as a majority of the remaining Partners shall promulgate. 9.07. Except as otherwise specifically provided, any Transferee not admitted to the Partnership shall not be entitled to vote, to interfere with the administration of the Business, to require any information or account of Partnership transactions, or to inspect the Partnership books, being merely entitled to receive the Guaranteed Payments under Section 4.03(a) or the share of Net Profit and Loss under Section 5 to which the Transferee's Transferor was otherwise entitled. 9.08. Notwithstanding the above, no Transfer shall be recognized if it would, in the sole and unreviewable opinion of the Partnership, result in the termination of the Partnership under Section 708(b) of the Code, or, under any circumstance, until the first day of the month succeeding the month in which the Partnership actually receives the instrument of Transfer in such form as legal counsel to the Partnership may approve. Section 10. Purchase Price and Closing Procedures 10.01. "Purchase Price" with respect to each Preferred Interest means the Liquidation Price of that Interest less a ratable share of any impairment which exists with respect to the Interest. With respect to each Common Interest, "Purchase Price" means the Adjusted Value of that Interest, determined as of the last day of the month preceding the month in which a Trigger Event shall have occurred or a Transferor shall have made an Offer, as the case may be. 10.02. "Adjusted Value" means a sum of money equal to: i The interest that a Common Partnership Interest represents in the capital and income accounts of the Partnership, as determined by all Partners, or, in the absence of an agreement as to such amount within 30 days from the submission of a determination to all Partners, by the Accountant, on the accrual basis of accounting as contrasted with the cash receipts and disbursements method of accounting; ii Plus, to the extent not otherwise reflected, the Appraised Value of all Property owned by the Partnership; iii Less, to the extent not otherwise reflected, mortgages, claims, liens, general real estate taxes, and special assessments attributable to the real estate; and iv Less the aggregate of the Liquidation Price in respect of all Preferred Partnership Interests issued and outstanding as of the referent date, divided by the number of Common Partnership Interests issued and
outstanding as of the same date. 10.03. "Appraised Value" means 100% of the then current full fair market value of the Property. The then current full fair market value of the Property shall either be agreed upon by all Partners, or in the absence of an agreement as to the value within 30 days from the submission of a determination to the Partners, by an appraiser selected by the Accountant. All expenses incurred shall be paid by the Partnership. 10.04. The Closing of the purchase of an Interest shall take place on the Closing Date and at the Partnership Office. "Closing" means the completion of all of the acts and transactions required by this Agreement to consummate effectively a purchase or purchase of an Interest. "Closing Date" means the first business day occurring 60 days after the receipt of a Transferor's Offer or a Trigger Event, as the case may be, or any other date as the Parties to the Closing shall jointly designate in writing. If a Closing cannot reasonably be held on the Closing Date, then the Closing shall be held as soon thereafter as is reasonably possible. 10.05. In return for Interests free and clear of all claims, liens, and encumbrances of every kind and nature, the purchaser of an Interest shall tender on the Closing Date 20% of the Purchase Price to the Transferor in cash and a Note evidencing the unpaid balance of the Purchase Price. "Note" means an unsecured negotiable promissory note of the purchaser of the Partnership Interests, representing the unpaid balance of the Purchase Price, that: i Is payable in substantially equal quarter-annual installments of interest and principal over a period of ten years, the first quarterly installment being due three months after the Closing Date; ii Bears interest at _________ per cent over the local commercial prime rate being offered by the Bank on the Closing Date, or ensuing business day if it falls other than on a business day, adjusted annually in respect of each ensuing 12 month period; iii Provides that the maker may prepay all or any portion of the unpaid balance at any time without penalty; iv Provides that a default in the payment of any installment of either principal or interest may, at the payee's option, cause the unpaid balance to be due and payable; v Provides that if the payee shall, for reasonable cause, deem himself or herself insecure, the unpaid balance shall be due and payable; and vi Provides that upon a Partnership Termination, the unpaid balance shall become due and payable. Section 11. Termination 11.01. The Partnership shall terminate either upon the expiration of the period beginning on the Execution Date and ending in the year _________ the bankruptcy or receivership of the Partnership, or the written agreement of a majority of the Partners, whichever shall occur first. 11.02. The withdrawal, retirement, expulsion, or death of any Holder shall not cause the termination of the Partnership and shall have no effect on the continuance of the Business except as expressly provided in this Agreement. The withdrawing, retired, or expelled Holder or the estate of a deceased Holder shall have no claim against the Partnership or the remaining Holders except for payments expressly provided in this Agreement.
11.03. Upon a Partnership Termination, the Partnership shall commence to wind up its affairs and to liquidate its investments. The Holders shall continue to be entitled to Guaranteed Payments and to share in Partnership Net Profits and Losses during the period of liquidation in the same manner as before the Partnership Termination. The Partnership shall have full right and unlimited discretion to determine the time, manner, and terms of any sale or sales of Partnership assets pursuant to liquidation, having due regard to the activity and condition of the relevant market and general financial and economic conditions. Upon the Partnership Termination, the assets of the Partnership shall be used or distributed in the following order: i To pay, or provide for the payment of, all Partnership liabilities and liquidating expenses and obligations; ii To pay any outstanding notes; and iii To make liquidating distributions to all Holders as provided in Section 4. 11.04. Each Holder shall look solely to the assets of the Partnership for all distributions with respect to the Partnership and his share of the Net Profit and Loss, and shall have no recourse therefor, upon Termination or otherwise, against any Holder. No Holder shall have any right to demand or receive property other than cash upon the dissolution and termination of the Partnership. Section 12. Miscellaneous Provisions 12.01. Any controversy or claim arising out of, or relating to, this Agreement or its breach shall be settled by arbitration in accordance with the existing rules of the American Arbitration Association. Judgment upon any award rendered may be entered in any court having jurisdiction. 12.02. The Partners agree that irreparable damage would be done if any Partner should bring an action in any court against the Partnership or any other Partner. Further, the Partners agree that equitable payments are to be made to a Partner whose relationship is terminated for any reason. Accordingly, each Partner accepts the provisions of this Agreement as its sole entitlement on the termination of its Interest and waives and renounces its right to a court decree of dissolution or to seek the appointment of a liquidator for the Partnership. 12.03. The Partners agree that it is impossible to determine the damages that will arise by reason of the failure of any Partner to perform the obligations under this Agreement. Accordingly, if any Partner shall institute any action or proceeding to enforce the provisions of this Agreement, every Partner against whom such action or proceeding is brought waives the claim or defense that a remedy exists at law. Section 13. General Conditions 13.01. All notices, requests, communications, and demands shall be in writing and shall be deemed to have been duly given if delivered in person or sent by registered or certified mail, postage prepaid, to the Partnership at the Partnership Office and to any Holder at his or her home address appearing on the books and records of the Partnership or such other place as any Holder shall periodically designate in writing. 13.02. The waiver by any Party of any breach of this Agreement, whether in a single instance or repeatedly, shall not be construed as a waiver of any rights under this Agreement against similar or additional breaches. Further, the waiver shall not be construed in any manner as a waiver by any
other Party of the need to adhere strictly to the terms and conditions of this Agreement or of any claim for damages or other remedy by reason of any breach. 13.03. Each Party shall execute, acknowledge, and deliver any additional documents, writings, or assurances as may periodically be required to give full force and effect to the terms and provisions of this Agreement. 13.04. The terms and provisions of this Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respective successors and assigns. 13.05. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument. 13.06. If any provision of this Agreement or its application to any Person or circumstance is invalid or unenforceable, then the remainder of this Agreement or the application of the provision to other Persons or circumstances shall not be affected. If any provision or application is invalid or unenforceable, then a suitable and equitable provision shall be substituted in order to carry out, so far as may be valid and enforceable, the intent and purpose of the invalid or unenforceable provision. 13.07. The interpretation of the terms and provisions of this Agreement shall be governed by the laws of the State of _________. III. Execution This Agreement has been executed at _________ as to each of the undersigned on the Execution Date noted below his or her signature. Partners: Parties: _______________ _______________ Dated: Dated: ....................................................................................... ....................................................................................... _______________ _______________ Dated: Dated: .............................................................................................................................................................................. _______________ _______________ Dated: Dated: .............................................................................................................................................................................. _______________ _______________ Dated: Dated: .............................................................................................................................................................................. _______________ _______________ Dated: Dated: .............................................................................................................................................................................. _______________ _______________