Sample Partnership Agreement Template

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Sample Partnership Agreement
THIS PARTNERSHIP AGREEMENT is made this __________ day of ____________
2XXX , by and between Partner 1 and Partner 2.
Explanatory Statement
The parties hereto desire to enter into the business of purchasing, acquiring, operating,
leasing, owning and selling Grape acreage and other specialty crop(s), including but not
limited to that certain parcel of land, and all improvements constructed thereon,
described as [specify address] and engaging in any other lawful phase or aspect of
viticulture or specialty crop agriculture. In order to accomplish their aforesaid desires, the
parties hereto desire to join together in a general partnership under and pursuant to the
Uniform Partnership Act, amended from time to time (the "Act").
NOW THEREFORE, in consideration of their mutual promises, covenants, and
agreements, and the Explanatory Statement, which Explanatory Statement is
incorporated by reference herein and made a substantive part of this Partnership
Agreement, the parties hereto do hereby promise, covenant and agree as follows:
Section 2. Principal Place of Business
The principal office and place of business of the Partnership (the "Office") shall be
located at Angell Road.
Section 3. Business and Purpose
3.1. The business and purposes of the Partnership are to manage, and operate, grape
vineyards. (the "Vineyards"), or interest therein, including but not limited to that certain
parcel of land and such other businesses and purposes as the Partners may from time
to time determine in accordance with Section 8 of this Agreement.
Section 4. Term
The Partnership shall commence upon the date of this Agreement, as set forth above.
Unless sooner terminated pursuant to the further provisions of this Agreement, the
Partnership shall continue without defined term.
Section 5. Capital Contribution
5.1. The original capital contributions to the Partnership of each of the Partners shall be
Sample Partnership Agreement
THIS PARTNERSHIP AGREEMENT is made this __________ day of ____________
2XXX , by and between Partner 1 and Partner 2.
Explanatory Statement
The parties hereto desire to enter into the business of purchasing, acquiring, operating,
leasing, owning and selling Grape acreage and other specialty crop(s), including but not
limited to that certain parcel of land, and all improvements constructed thereon,
described as [specify address] and engaging in any other lawful phase or aspect of
viticulture or specialty crop agriculture. In order to accomplish their aforesaid desires, the
parties hereto desire to join together in a general partnership under and pursuant to the
Uniform Partnership Act, amended from time to time (the "Act").
NOW THEREFORE, in consideration of their mutual promises, covenants, and
agreements, and the Explanatory Statement, which Explanatory Statement is
incorporated by reference herein and made a substantive part of this Partnership
Agreement, the parties hereto do hereby promise, covenant and agree as follows:
Section 2. Principal Place of Business
The principal office and place of business of the Partnership (the "Office") shall be
located at Angell Road.
Section 3. Business and Purpose
3.1. The business and purposes of the Partnership are to manage, and operate, grape
vineyards. (the "Vineyards"), or interest therein, including but not limited to that certain
parcel of land and such other businesses and purposes as the Partners may from time
to time determine in accordance with Section 8 of this Agreement.
Section 4. Term
The Partnership shall commence upon the date of this Agreement, as set forth above.
Unless sooner terminated pursuant to the further provisions of this Agreement, the
Partnership shall continue without defined term.
Section 5. Capital Contribution
5.1. The original capital contributions to the Partnership of each of the Partners shall be
made concurrently with their respective execution, acknowledgement, sealing and
delivery of this Agreement in the following dollar amounts set forth after their respective
names:
Partner 1: Capital contribution includes his existing grape acreage as of January
1, 2010. Grape acreage is estimated, with a 5% margin of error, at 190 acres valued at
approximately 775,000. An additional cash capital contribution of $180,000 will also be
made. Capital contribution does not include any equipment, buildings, or open land.
Partner 2: Capital contribution is $180,000 to be financed by Partner 1 or another
lender.
5.2. Except as specifically provided in this Agreement, or as otherwise provided by and
in accordance with law to the extent such law is not inconsistent with this Agreement, no
Partner shall have the right to withdraw or reduce his or her contributions to the capital of
the Partnership.
Section 6. Profit and Loss
6.1. The percentages of Partnership Rights and Partnership Interest of each of the
Partners shall be as follows:
Partner 1:
84%
Partner 2:
16%
6.2. Except as provided in Section 7.3. of this Agreement, for purposes of Sections 702
and 704 of the Internal Revenue Code of 1954, or the corresponding provisions of any
future federal internal revenue law, or any similar tax law of any state or jurisdiction, the
determination of each Partner's distributive share of all items of income, gain, loss,
deduction, credit or allowance of the Partnership for any period or year shall be made in
accordance with, and in proportion to, such Partner's percentage of Partnership Interest
as it may then exist.
Section 7. Distribution of Profits
7.1. Generally, gross cash distribution in proportion to Partners percentages of
partnership interest, will be made based on the scheduled payments of processors or
within 60 days of payments being made. The gross cash distribution
7.2 Generally, operating expenses will be shared at the time those expenses are
realized in proportion to Partners percentages of partnership interest. While each
purchase will not require an accounting of partnership interest, reimbursement to the
payor, based on share, will be resolved every 30 days.
7.3 Exception to section 7.2: Partner 2 will not be responsible for any operating
expenses for the first ___ year. His share of expenses during that time will be limited to
his capital contribution payments.
Section 8. Management of the Partnership Business
8.1. All decisions respecting the management, operation and control of the Partnership
business and determination made in accordance with the provisions of this Agreement
shall be made based upon a majority share of the partnership in favor of the decision.
Majority owner Partner 1 has the full intention of increasing the responsibility and stake
of Partner 2’s management, operation and control of the Partnership. Succession of
such powers will take place, at first on a day to day basis. Later, based on performance,
a management agreement will be incorporated into this Partnership
8.2. Nothing herein contained shall be construed to constitute any Partner or the agent
of another Partner, except as expressly provided herein, or in any manner to limit the
Partnership to the carrying on of their own respective businesses or activities. Any of the
Partners, or any agent, servant or employee of any of the Partners, may engage in and
possess any interest in other businesses or ventures of every nature and description,
independently or with other persons, whether or not, directly or indirectly, in competition
with the business or purpose of the Partnership, and neither the Partnership nor any of
the Partners shall have any rights, by virtue of this Agreement or otherwise, in and to
such independent ventures or the income or profits derived therefrom, or any rights,
duties or obligations in respect thereof.
8.3. The Partners shall devote to the conduct of the Partnership business so much of
their respective time as may be reasonably necessary for the efficient operation of the
Partnership business. That will include a significant amount of time during harvest in
order to secure the use of Partner 1’s custom harvest equipment and other equipment
owned by Partner 1 for Partnership use during the growing season. At this time both
partners expect to contribute approximately 2,500 hours annually. To the extent that
partners cannot devote adequate time to the business due to health, outside ventures,
jobs or other reasons said partner will be responsible for finding replacement labor and
covering the costs of said labor.
Section 9. Salaries
Unless otherwise agreed by the Partners in accordance with Section 8 of this
Agreement, no Partner shall receive any salary for services rendered to or for the
Partnership. At the discretion of majority partner the minority partner will be eligible to
receive up to 1% of the total equity interest in the operation per year based on
performance of the Partner and the Partnership. It is the intent of the majority partner to
begin making this transfer after ___ years.
Section 10. Legal Title to Partnership Property
Legal title to the property of the Partnership shall be held in the name of or in such other
name or manner as the Partners shall determine to be in the best interest of the
Partnership. Without limiting the foregoing grant of authority, the Partners may arrange
to have title taken and held in their own names or in the names of trustees, nominees or
straw parties for the Partnership. It is expressly understood and agreed that the manner
of holding title to property (or any part thereof) of the Partnership is solely for the
convenience of the Partnership, and that all such property shall be treated as
Partnership property subject to the terms of this Agreement.
Section 12. Fiscal Year Audits
This partnership is the expansion of a small business built in family and trust. Records
will be imperfect but maintained to current standards of the business. Audits would be
impractical and expensive and rather than relying on outside auditors the partners will
rely on themselves to fairly apportion expenses and profits.
Section 11. Banking
All revenue of the Partnership shall be deposited regularly in the Partners private
savings and checking accounts at such bank or banks as shall be selected by the
Partners. The partners will not borrow any money by or on behalf of, the Partnership.
Section 13. Transfer of Partnership Interest and Partnership Rights
Except as otherwise provided in Sections 14, 15 and 16 hereof, no Partner (hereinafter
referred to as the "Offering Partner") shall, during the term of the Partnership, sell,
hypothecate, pledge, assign or otherwise transfer with or without consideration
(hereinafter collectively referred to as a "Transfer") any part or all of his Partnership
Interest or Partnership Rights in the Partnership to any other person (a "Transferee"),
without first offering (hereinafter referred to as the "Offer") that portion of his Partnership
Interest and Partnership Rights in the Partnership subject to the contemplated transfer
(hereinafter referred to as the "Offered Interest") first to the Partnership, and secondly, to
the other Partners, at a purchase price (hereinafter referred to as the "Transfer Purchase
Price") and in a manner as follows:
13.1. The Transfer Purchase Price shall be 93% of the Appraised Value (as defined in
Section 18.1.) except that start up assistance shall be deducted from the appraised
value until 2025. Start up assistance is valued at $45,000
13.1.1. The Offer shall be made by the Offering Partner first to the Partnership by written
notice (hereinafter referred to as the "Offering Notice). Within twenty (20) days
(hereinafter referred to as the "Partnership Notice"), whether or not the Partnership shall
accept the Offer and shall purchase all but not less than all of the Offered Interest. If the
Partnership accepts the Offer to purchase the Offered Interest, the Partnership Notice
shall fix a closing date not more than sixty (60) days (hereinafter referred to as the
"Partnership Closing Date") after the expiration of the Partnership Offer Period.
13.1.2. In the event the Partnership decides not to accept the Offer, the Offering Partner
or the Partnership, at his or its election, shall, by written notice (hereinafter referred to as
the "Remaining Partner Notice") given within that period (hereinafter referred to as the
"Partner Offer Period") terminating ten (10) days after the expiration of the Partnership
Offer Period, make the Offer of the Offered Interest to the other Partners, each of whom
shall then have a period of twenty-five (25) days (the "Partner Acceptance Period") after
the expiration of the Partner Offer Period within which to notify in writing the Offering
Partner whether or not he intends to purchase all but not less than all of the Offered
Interest. If two (2) or more Partners of the Partnership desire to accept the Offer to
purchase the Offered Interest, then, in the absence of an agreement between them,
such Partners shall have the right to purchase the Offered Interest in the proportion
which their respective percentage of Partnership Interest in the Partnership bears to the
percentage of Partnership Interest of all of the Partners who desire to accept the Offer. If
the other Partners intend to accept the Offer and purchase the Offered Interest, the
written notice required to be given by them shall fix a closing date not more than sixty
(60) days after the expiration of the Partner Acceptance Period (hereinafter referred to
as the "Partner Closing Date").
13.2. The aggregate dollar amount of the Transfer Purchase Price shall be payable in
cash on the Partnership closing date or on the Partner Closing date, as the case may
be, unless the Partnership or the purchasing Partners shall elect prior to or on the
Partnership Closing Date or the Partner Closing Date, as the case may be, to purchase
such Offered Interest in installments pursuant to the provisions of Section 19.
13.3. If the Partnership or the other Partners fail to accept the Offer or, if the Offer is
accepted by the Partnership or the other Partners and the Partnership or the other
Partners fail to purchase all of the Offered Interest at the Transfer Purchase Price within
the time and in the manner specified in this Section 13, then the Offering Partner shall
be free, for a period (hereinafter referred to as the "Free Transfer Period") of ninety (90)
days from the occurrence of such failure, to transfer the Offered Interest shall be
liquidated based on the following method. To transfer interest to a third party the

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