Create a Customized Partnership Agreement

This template was prepared by: Anthony Chelidonis, Anthony Chelidonis

Instructions

It is extremely important that any proposed partnership is based upon a detailed Partnership Agreement and that such an agreement is signed prior to the start of the partnership, or as soon as possible afterward. All the partners need to be aware of their rights and responsibilities from the beginning so that the partnership can focus upon being successful. 

Partnership Agreement

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THIS PARTNERSHIP AGREEMENT (this "Agreement") dated
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Number of Partners in the Partnership:
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BETWEEN:
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The first partner is:
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of
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( the " Partner 1 ")
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OF THE FIRST PART
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and
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The second partner is:
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of
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( the " Partner 2 ")
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OF THE SECOND PART
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( Partner 1 and Partner 2 collectively the "Partners" and individually the "Partner")
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Background:
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The Partners intend to associate themselfs as partnerst in Business
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This Agreement sets out the terms and conditions that govern the Partners within the Parthership
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IN CONSIDERATION OF and as a condition of the Partners entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration in asknowledged, the Partners agree as follows:
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1
Definitions and Interpretation
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In this Agreement, unless otherwise expressly stated or the context otherwise requires, the following words and expressions shall have the following meanings:
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1.1
“Additional Capital Contributions”: means Capital Contributions, other than Initial Capital Contributions, made by Partners to the Partnership;
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1.2
“Capital Contribution”: means the total amount of cash or Property contributed to the Partnership by any one Partner;
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1.3
“Dissociated Partner”: means any Partner who is removed from the Partnership through a voluntary or involuntary withdrawal as provided in this Agreement;
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1.4
“Expulsion of a Partner”: can occur on application by the Partnership or another Partner, where it has been determined that the Partner:
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1.4.1
has engaged in wrongful conduct that adversely and materially affected the Partnership’s business;
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1.4.2
has wilfully or persistently committed a material breach of this Agreement or of a duty owed to the Partnership or to the other Partners; or.
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1.4.3
has engaged in conduct relating to the Partnership’s business that makes it not reasonably practicable to carry on the business with the Partner.
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1.5
“Force Majeure Event”: means any cause affecting the performance by a Party of its obligations under this Agreement arising from acts, events, omissions or non-events beyond its reasonable control, including acts of God, riots, war, acts of terrorism, fire, flood, storm or earthquake and any disaster;
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1.6
“Initial Capital Contribution”: means Capital Contributions made by any Partner to acquire an interest in the Partnership;
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1.7
“Operation of Law”: means rights or duties that are cast upon a party by the law, without any act or agreement on the part of the individual including, but not limited to, an assignment for the benefit of creditors, a divorce, or a bankruptcy;
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1.8
Except as otherwise set out in this Agreement or where the context otherwise requires, any reference, express or implied, to any Regulations are to be construed as references to those Regulations as from time to time in force amended or to any Regulations from time to time replacing, re-enacting, extending, consolidating or amending the same or any similar Regulations;
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1.9
Unless the contrary intention appears, in this Agreement:
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1.9.1
references to a person include an individual, a body corporate, partnership, state and an unincorporated association of persons;
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1.9.2
references to a Party to this Agreement include references to the successors, assigns or transferees (immediate or otherwise) of that Party;
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1.9.3
use of the words, “includes” or “including” or similar words or phrases means without limitation and the use of these or similar words or phrases shall not limit the meaning of the general words;
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1.9.4
words denoting the singular shall include the plural and vice versa and references to any gender shall include all other genders;
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1.9.5
references to Recitals and Clauses are to (respectively) recitals and clauses of this Agreement (unless otherwise specified);
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1.9.6
each reference to a document is a reference to that document as amended from time to time; and.
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1.9.7
a reference to “writing” or “written” shall include faxes and email.
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1.10
The headings in this Agreement do not affect its interpretation.
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2
Formation
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By this Agreement the Partners enter into a general partnership (the "Partnership") in accordance with the laws of England and Wales.
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3
Name
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The name of the Partnership will be:
.
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4
Purpose
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4.1
The purpose of the Partnership will be:
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4.1.1
;
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5
Term
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The Parthership shall begin on
and will continue
as provided in this Agreement.
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6
Place of Business
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The principal office of the business of the Partnership will be located at
or such other place as the Partners may from time to time designate.
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7
Capital Contributions and Accounts
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7.1
Partners' Capital Contributions are as follows:
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7.1.1
has contributed
+ In Words
;
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7.2
No Partner will withdraw any portion of their Capital Contribution without the express written consent of the remaining Partners.
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7.3
All Partners will contribute their respective Capital Contributions fully and on time.
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7.4
No Partner will be required to make any Additional Capital Contribution other than the Capital Contribution.
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7.5
A Capital Account will be maintained for each Partner and their Capital Contribution will be credited to this account. Any Additional Capital Contributions made by any Partner will be credited to that Partner's Individual Capital Account.
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8
Interest on Capital
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No loan interest or borrowing charge will be due or payable to any Partner on their agreed Capital Contribution and Additional Capital Contribution.
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9
Profit and Loss
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9.1
Subject to the other provisions of this Agreement, the net profits and losses of the Partnership, for both accounting and tax purposes, will accrue to and be borne by the Partners
(the "Profit and Loss Distribution").
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9.2
Profit and Loss Distribution among all the Partners will be adjusted to reflect the aggregate change in the Capital Contribution made by the Partners.
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9.3
Decisions regarding the distribution of profits, allocation of losses, and the requirement of Additional Capital Contribution as well as all other financial matters will be decided by a
vote of the Partners.
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10
Compensation for Services Rendered
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Partners
be compensated for services to the Partnership as from time to time may be agreed by
consent of the Partners.
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11
Management
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Who will manage day-to-day business and sign contracts?
11.1
Except as all of the Partners may otherwise agree in writing, all actions and decisions respecting the management, operation and control of the Partnership and its business will be decided by a
vote of the Partners.
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11.2
Each Partner will have authority to bind the Partnership in contract or agreement.
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12
Meetings
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12.1
Regular meetings of the Partners will be held
.
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12.2
can call a special meeting to resolve issues that require a vote, as indicated in this Agreement, by providing all Partners with reasonable notice. In case of a special vote, the meeting will be restricted to the specific purpose for which the meeting was held.
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12.3
All meetings will be held at a time and in a location that is reasonable and convenient to all Partners.
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12.4
In any vote required by the Partnership, the vote cast by each Partner will be in proportion to Profit and Loss sharing ratios as described in Clause 9 of this Agreement.
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13
Actions Requiring Unanimous Consent
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13.1
The following list of actions will require the unanimous consent of all Partners:
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13.1.1
Assigning cheque-signing authority;
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13.1.2
Committing the Partnership to new liabilities or obligations totalling over
+ In Words
;
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13.1.3
Incurring single expenditures that exceed
+ In Words
;
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13.1.4
Selling or encumbering of any Partnership asset whose fair market value exceeds
+ In Words
;
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13.1.5
Hiring any employee whose total compensation package exceeds
+ In Words
; per
.
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13.1.6
Firing of any employee;
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13.1.7
Waiving or releasing any Partnership claim;
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13.1.8
Endangering the ownership or possession of Partnership property;
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13.2
Any loses incurred as a result of a violation of this Clause 13 will be charged to and collected from the individual Partner that acted without unanimous consent and caused the loss.
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14
Duty of Loyalty
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14.1
No Partner will engage in any business, venture or transaction, whether directly or indirectly, that might be competitive with the business of the Partnership or that would be in direct conflict of interest to the Partnership without a written consent of
remaining Partners.
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14.2
Any and all businesses, ventures or transactions with any appearance of conflict of interest must be fully disclosed to all other Partners.
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14.3
No Partner may:
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14.3.1
do any act in contravention of this Agreement;
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14.3.2
permit, intentionally or unintentionally, the assignment of express, implied or apparent authority to a third party that is not a Partner in the Partnership;
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14.3.3
do any act that would make it impossible to carry on the ordinary business of the Partnership;
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14.3.4
may confess a judgment against the Partnership;
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14.3.5
will have the right or authority to bind or obligate the Partnership to any extent with regard to any matter outside the intended purpose of the Partnership.
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14.4
Failure to comply with any of the terms of this clause will be deemed an Involuntary Withdrawal of the offending Partner and may be treated accordingly by the remaining Partners.
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15
Duty to Devote Time
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Each Partner will devote such time and attention to the business of the Partnership as
Partners will from time to time determine for the conduct of the Partnership business.
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16
Books of Account
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16.1
Accurate and complete books of account of the transactions of the Partnership will be kept in accordance with generally accepted accounting principles (GAAP) and at all reasonable times will be available and open to inspection and examination by any Partner. The books and records of the Partnership will reflect the Partnership's transactions and will be appropriate and adequate for the business conducted by the Partnership.
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16.2
Fiscal year will end on the
day of
of each year.
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17
Annual Report
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17.1
As soon as practicable after the close of each fiscal year, the Partnership will furnish to each Partner an annual report showing a full and complete account of the condition of the Partnership. This report will consist of at least the following documents:
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17.1.1
A statement of all information as will be necessary for the preparation of each Partner's income or other tax returns;
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17.1.2
A copy of the Partnership's income tax returns for such fiscal year;
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17.1.3
Supporting income statement;
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17.1.4
A balance sheet;
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17.1.5
A cash flow statement;
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17.1.6
A breakdown of the profit and loss attributable to each Partner.
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18
Audit
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Any of the Partners will have the right to request an audit of the Partnership books. The cost of the audit will be borne by
. The audit will be performed by an accounting firm decided by a
vote of the Partners. No more than
will be required by any or all of the Partners for any fiscal year.
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19
Banking and Partnership Funds
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The funds of the Partnership will be placed in such investments and banking accounts as will be designated by the Partners. All withdrawals from these bank accounts will be made by the duly authorised agents of the Partners as agreed by
consent of the Partners. Partnership funds will be held in the name of the Partnership and will not be commingled with those of any other person or entities.
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20
Private Profits
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Each Partner must account to the Partnership for any benefit derived by such Partner without the consent of the other Partners from any transaction concerning the Partnership or any use by that Partner of the Partnership Property, name or business connection. This duty continues to apply to any transactions undertaken after the Partnership has been dissolved but before the affairs or the Partnership have been completely wound up by the remaining Partners.
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21
New Partner
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21.1
A new partner of the Partnership (the "New Partner") may only be admitted to the Partnership with a
vote of the existing Partners.
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21.2
Any New Partner agrees to be bound by all the covenants, terms and conditions of this Agreement, inclusive of all current and future amendments. In addition, a New Partner will execute such documents as are needed to effect the admission of the New Partner. Any New Partner will receive such business interest in the Partnership as determined by a
decision of the other Partners.
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22
Withdrawal and Dissociation of Partner
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22.1
Any Partner will have the right to withdraw from the Partnership at any time (the "Voluntary Withdrawal"). Written notice of intention to withdraw must be served upon the remaining Partners at least
prior to the withdrawal date.
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22.2
The Voluntary Withdrawal of any Partner
result in the dissolution of the Partnership and will have no effect upon the continuance of the Partnership's business.
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22.3
The Partners will only exercise the right to Voluntary Withdrawal in good faith and will act to minimise any present or future harm done to the remaining Partners as a result of the Voluntary Withdrawal.
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22.4
Events resulting in the Involuntary Withdrawal of a Partner from the Partnership (the "Involuntary Withdrawal") will include
:
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22.4.1
Death of a Partner;
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22.4.2
Partner’s mental incapacity;
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22.4.3
Partner’s disability preventing reasonable participation in the Partnership;
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22.4.4
Partner’s incompetence;
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22.4.5
Breach of fiduciary duties by a Partner;
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22.4.6
Criminal conviction of a Partner;
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22.4.7
Expulsion of a Partner;
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22.4.8
Operation of law against a Partner;
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22.4.9
Any act or omission of a Partner that can reasonably be excepted to bring the business reputation of the Partnership into disrepute.
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22.5
Where the dissociation of a Partner through Voluntary Withdrawal or Involuntary Withdrawal (the "Dissociated Partner") for any reason results in the dissolution of the Partnership then the Partnership will proceed in a reasonable and timely manner to dissolve the Partnership, with all debts being paid first, prior to any distribution of the remaining funds. Valuation and distribution will be determined as described in Clause 26 of this Agreement.
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22.6
The remaining Partners retain the right to seek damages from a Dissociated Partner where the dissociation resulted from a malicious or criminal act by the Dissociated Partner or where the Dissociated Partner had breached their fiduciary duty to the Partnership or was in breach of this Agreement of had acted in a way that could be reasonably foreseen to bring harm or damage to the Partnership or to the reputation of the Partnership.
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23
Title to Partnership Property
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Title to all the Premises and all other assets (or rights in them) which are used by the Partnership for the purposes of the business (the “Partnership Property”) will remain in the name of the Partnership. No Partner or group of Partners will have any ownership interest in such Partnership Property in whole or in part.
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24
Intellectual Property Assets and Goodwill
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24.1
The following intellectual property or assets shall be included as Partnership property and shall belong to the Partnership; all domain names, website data and coding, all images (whether graphics or photographs), customer data, existing and future commercial agreements with outside third parties and all goodwill associated with the above.
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24.2
All other relevant goodwill built-up in the Partnership shall also belong to the Partnership.
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25
Dissolution
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25.1
The Partnership will be dissolved upon a
vote of all Partners.
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25.2
In the event of the dissolution of the Partnership, each Partner will share in any remaining assets or liabilities of the Partnership
(the "Dissolution Distribution").
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25.3
Upon Dissolution of the Partnership and liquidation of the Partnership Property, and after payment of all selling costs and expenses, the liquidator will distribute the Partnership assets to the following groups according to the following order of priority:
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25.3.1
In satisfaction of liabilities to creditors except Partnership obligations to current Partners;
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25.3.2
In satisfaction of Partnership debt obligations to current Partners;
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25.3.3
And then to the Partners according to the Dissolution Distribution described in Clause 25.2 of this Agreement.
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25.4
The claims of each priority group will be satisfied in full before satisfying any claims of a lower priority group. Any excess of Partnership assets after liabilities or any insufficiency in Partnership assets in resolving liabilities under this Clause will be shared by the Partners according to the Dissolution Distribution described above.
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26
Valuation of Interest
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In the absence of a written agreement setting a value, the value of the Partnership will be based on the fair market value appraisal of all Partnership assets (less liabilities) determined in accordance with generally accepted accounting principles (the "GAAP"). This appraisal will be conducted by an independent accounting firm agreed to by
Partners. An appraiser will be appointed within a reasonable period of the date of withdrawal or dissolution. The results of the appraisal will be binding on all Partners. A withdrawing Partner's interest will be based on that Partner’s proportion of the Dissolution Distribution of such Dissociated Partner, less any outstanding liabilities such Dissociated Partner may have to the Partnership.
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Shall be Partners indemnified?
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27
Indemnification
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27.1
Except to the extent paid in settlement from any applicable insurance policies, and to the extent permitted by applicable law, each Partner agrees to indemnify and hold harmless the other Partners, and its respective affiliates, officers, agents, employees, and permitted successors and assigns against any and all claims, losses, damages, liabilities, penalties, punitive damages, expenses, reasonable legal fees and costs of any kind or amount whatsoever, which result from or arise out of any act or omission of the indemnifying Partner, its respective affiliates, officers, agents, employees, and permitted successors and assigns that occurs in connection with this Agreement.
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27.2
Each Partner will be indemnified and held harmless by the Partnership from and against any and all claims of any nature, whatsoever, arising out of a Partner's participation in Partnership affairs.
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27.3
Any Partner will not be entitled to indemnification under this Clause 27 for liability arising out of gross negligence or wilful misconduct of the Partner or the breach by the Partner of any provisions of this Agreement.
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28
Liability Insurance
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The Partnership will have the right to acquire life insurance on the lives of any or all of the Partners, whenever it is deemed necessary by the Partnership. Each Partner will cooperate fully with the Partnership in obtaining any such policies of life insurance.
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29
Notice
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29.1
All notices or other communications shall be deemed given upon personal delivery to the appropriate address, or if sent by certified or registered mail,
days after the date of mailing to the following:
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29.2
To: Partner 1.
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Individual Name:
.
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Company:
.
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Phone:
.
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Email:
.
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29.3
To: Partner 2.
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Individual Name:
.
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Company:
.
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Phone:
.
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Email:
.
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29.4
Any written communication or notice under Clause shall be considered to have been received by the addressee as follows:
Business Days following the date of despatch of the notice or other document by post; immediately upon delivery where delivery is by hand; or on the next Business Day following email. To prove that a notice or other document was received it shall be sufficient to show that it was properly addressed and despatched or successfully received electronically by the recipient.
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30
Force Majeure
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30.1
Neither party shall be responsible for damages to the other party to the extent that a breach of this Agreement (or failure to perform) by such party is due to a Force Majeure.
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30.2
During any delay in performance due to an event of Force Majeure, the disabled party shall use its reasonable efforts and due diligence to resolve the cause of the delay and to minimize the effects thereof. If any of the obligations of any of the parties is hindered or prevented, in whole or in substantial part, because of a Force Majeure Event, then all other obligations of the parties shall continue. Delays or non-performance excused by this provision shall not excuse performance of any other obligation that is outstanding at the time of occurrence.
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30.3
Notwithstanding the preceding, in the event such Force Majeure continues for a period of
consecutive months, either party shall have the right, but not the obligation, to serve a written notice on the other terminating this Agreement in full and each shall have no further obligation whatsoever to the other save that Company shall continue to be obliged to make payments of monies due hereunder but not paid at the date of termination.
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31
Contracts (Rights of Third-Parties)
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The Parties hereby expressly agree that any person who is not a party to this Agreement shall have no right to enforce any term of this Agreement or against either of the Parties pursuant to the Contracts (Rights of Third Parties) Act 1999.
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32
Pronouns; Statutory References
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All pronouns and all variations thereof shall be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the context in which they are used may require. Any reference to the Code, the Regulations, the Act, or other statutes or laws will include all amendments, modifications, or replacements of the specific clauses and provisions concerned.
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33
Interpretation
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In the event any claim is made by any Party relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this agreement was prepared by or at the request of a particular Party or the Party’s counsel.
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34
Changes to this Agreement
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Changes to this Agreement shall only take place by unanimous vote of the partners and such changes shall be evidenced by an Agreement supplementary to this Agreement and executed by all the Partners.
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35
Severability
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In the event that any term or provision of this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such validity, illegality or unenforceability shall not affect any other term or provision, and this Agreement shall be interpreted and construed as if such term or provision, to the extent the same shall have been held invalid, illegal or unenforceable, had never been contained herein.
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36
Assignment
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assign, transfer, charge or otherwise deal with any of its rights under this Agreement without the prior written consent of the remaining Partners.
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37
Termination
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This partnership shall be terminated by the death or material incapacity of any partner, mutual agreement, or upon the written request for termination made by any one partner. Upon termination by reason of death, incapacity or request, the remaining partners shall have the right to continue the business of the partnership on their own behalf or together with new or additional partners, provided they pay the terminated partner the fair market value of his partnership interest (as determined by the accountant for the partnership) together with suitable indemnification for all of their existing partnership obligations.
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38
Governing Law and Jurisdiction
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38.1
This Agreement and any Dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and interpreted in accordance with the laws of England and Wales.
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38.2
The courts of England and Wales shall have the exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims), and the Parties hereby submit to the exclusive jurisdiction of the English courts.
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39
Paragraph Headings
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The paragraph headings used herein are descriptive only and shall not affect the meaning or interpretation of this Agreement.
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40
Counterparts
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This Agreement may be executed in any number of counterparts and by the Parties in separate counterparts. Each counterpart, when executed, shall constitute an original and all the counterparts together shall constitute one and the same instrument.
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41
Entire Agreement
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This Agreement constitutes the entire understanding between the parties with respect to the subject matter contained herein.
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AS WITNESS the signatures of the Parties or their duly authorised representatives on _____
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SIGNED, SEALED AND DELIVERED
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__________________________________
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_____
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SIGNED, SEALED AND DELIVERED
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__________________________________
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_____
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