Partnership Agreement - General (Arizona)

GENERAL PARTNERSHIP AGREEMENT

STATE OF ARIZONA

DOCUMENT HEADER

This General Partnership Agreement (this "Agreement") is entered into as of [EFFECTIVE DATE] (the "Effective Date") by and among the undersigned individuals and/or entities (each a "Partner" and collectively, the "Partners").

The Partners hereby form a general partnership (the "Partnership") pursuant to the Arizona Revised Uniform Partnership Act, Arizona Revised Statutes ("A.R.S.") § 29-1001 et seq. (the "Arizona RUPA").

TABLE OF CONTENTS

1. Definitions
2. Formation and Basic Terms
3. Capital Contributions and Partnership Interests
4. Additional Contributions and Capital Calls
5. Allocations of Profits and Losses
6. Distributions
7. Tax Matters
8. Management and Voting
9. Partner Meetings
10. Duties and Obligations of Partners
11. Fiduciary Duties
12. Representations and Warranties
13. Covenants and Restrictions
14. Books, Records, and Accounting
15. Banking and Funds
16. Insurance
17. Indemnification and Liability
18. Transfer of Partnership Interests
19. Right of First Refusal
20. Buyout Provisions
21. Withdrawal of Partners
22. Dissociation Events
23. Dissolution and Winding Up
24. Default and Remedies
25. Dispute Resolution
26. Confidentiality
27. Non-Competition and Non-Solicitation
28. General Provisions
29. Arizona-Specific Provisions
30. Execution
31. Schedules

1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below:

"Act" or "Arizona RUPA" means the Arizona Revised Uniform Partnership Act, A.R.S. § 29-1001 et seq., as amended from time to time.

"Adjusted Capital Account" means the Capital Account of each Partner, adjusted as required by Treasury Regulations and this Agreement.

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person.

"Business Day" means any day other than a Saturday, Sunday, or a day on which banks in Arizona are authorized or required to close.

"Capital Account" means the capital account maintained for each Partner in accordance with Section 5.3.

"Capital Contribution" means the total amount of cash and the agreed fair market value of property (net of liabilities) contributed or agreed to be contributed by each Partner to the Partnership as set forth on Schedule A.

"Distributable Cash" means the cash of the Partnership available for distribution after payment of or provision for: (i) operating expenses; (ii) debt service; (iii) capital expenditures; and (iv) reasonable reserves as determined by the Managing Partner(s).

"Dissociation" has the meaning set forth in A.R.S. § 29-1061.

"Dissolution Event" means any event described in Section 23 or A.R.S. § 29-1081.

"Fair Market Value" means the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell, and both having reasonable knowledge of relevant facts.

"Fiscal Year" means the Partnership's fiscal year for accounting and tax purposes, which shall be the calendar year unless otherwise determined by the Partners.

"Majority in Interest" means Partners holding more than fifty percent (50%) of the aggregate Percentage Interests.

"Managing Partner" means the Partner(s) designated to manage the day-to-day affairs of the Partnership as set forth on Schedule A.

"Net Profits" and "Net Losses" mean, for each Fiscal Year, the net taxable income or loss of the Partnership, with adjustments as required by Treasury Regulations.

"Partnership Interest" means a Partner's entire interest in the Partnership, including economic rights (Percentage Interest) and management/governance rights, as defined in A.R.S. § 29-1001(15).

"Percentage Interest" means a Partner's percentage ownership interest in the Partnership as set forth on Schedule A, which shall be used for allocations of profits, losses, and distributions unless otherwise specified.

"Person" means an individual, corporation, partnership, limited liability company, trust, estate, association, or any other entity.

"Supermajority" means Partners holding at least two-thirds (66.67%) of the aggregate Percentage Interests.

"Transfer" means any sale, assignment, pledge, hypothecation, encumbrance, gift, or other disposition, whether voluntary or involuntary.

"Transferable Interest" has the meaning set forth in A.R.S. § 29-1001(25), representing a Partner's share of profits, losses, and distributions.

2. FORMATION AND BASIC TERMS

2.1 Formation

The Partners hereby form a general partnership pursuant to the Arizona RUPA. The Partnership shall be governed by this Agreement and, to the extent not inconsistent herewith, by the Arizona RUPA.

2.2 Partnership Name

The Partnership shall conduct business under the name: "[PARTNERSHIP NAME]"

The Partnership may also conduct business under such trade names or "doing business as" names as the Managing Partner(s) may determine, subject to compliance with A.R.S. § 44-1460.

2.3 Purpose

The purpose of the Partnership is to:
[DESCRIBE BUSINESS PURPOSE IN DETAIL - e.g., "engage in the business of real estate development, acquisition, management, and disposition of commercial properties in the State of Arizona and such other lawful business activities as the Partners may approve"]

2.4 Principal Office

The principal office of the Partnership shall be located at:
[STREET ADDRESS]
[CITY], Arizona [ZIP CODE]

The principal office may be changed by the Managing Partner(s) with notice to all Partners.

2.5 Registered Agent

Pursuant to A.R.S. § 29-1005, the Partnership designates the following as its initial registered agent for service of process in Arizona:

Registered Agent Name: [NAME]
Registered Agent Address: [STREET ADDRESS], [CITY], Arizona [ZIP CODE]

The registered agent may be changed by filing an updated statement with the Arizona Secretary of State.

2.6 Term

The Partnership shall commence on the Effective Date and shall continue until:
☐ Perpetual - until dissolved in accordance with this Agreement or the Arizona RUPA
☐ Fixed Term - until [DATE], unless earlier dissolved
☐ Completion of Purpose - until [DESCRIBE SPECIFIC UNDERTAKING], unless earlier dissolved

2.7 Statement of Partnership Authority

The Partners authorize the filing of a Statement of Partnership Authority with the Arizona Secretary of State pursuant to A.R.S. § 29-1033 to evidence the authority of the Managing Partner(s) to act on behalf of the Partnership. The Statement shall be filed within [30] days of the Effective Date.

3. CAPITAL CONTRIBUTIONS AND PARTNERSHIP INTERESTS

3.1 Initial Capital Contributions

Each Partner shall contribute to the Partnership the Capital Contribution set forth opposite such Partner's name on Schedule A attached hereto.

3.2 Timing of Contributions

Initial Capital Contributions shall be made as follows:
☐ In full upon execution of this Agreement
☐ [___]% upon execution; balance within [___] days
☐ According to the schedule set forth on Schedule A

3.3 Percentage Interests

Each Partner's Percentage Interest in the Partnership is set forth on Schedule A. The Percentage Interests of all Partners shall equal 100%.

3.4 No Interest on Capital

Except as otherwise provided herein, no Partner shall be entitled to interest on any Capital Contribution.

3.5 Return of Capital

Except as otherwise provided herein or required by law, no Partner shall have the right to demand or receive the return of any Capital Contribution.

3.6 Form of Contributions

Capital Contributions may be made in:
☐ Cash
☐ Property (at Fair Market Value as determined by the Partners)
☐ Services (if agreed upon by all Partners and permitted by tax law)

The nature of each Partner's Capital Contribution is set forth on Schedule A.

4. ADDITIONAL CONTRIBUTIONS AND CAPITAL CALLS

4.1 Mandatory Additional Contributions

☐ No Partner shall be required to make additional Capital Contributions beyond those set forth on Schedule A.
☐ Partners shall be required to make additional Capital Contributions as described below:
[DESCRIBE MANDATORY CONTRIBUTION REQUIREMENTS]

4.2 Capital Calls

If the Managing Partner(s) determine that additional capital is required for Partnership purposes, the Managing Partner(s) may issue a capital call by providing written notice to all Partners specifying:

• The amount required from each Partner (pro rata based on Percentage Interests)
• The purpose for which the capital is needed
• The deadline for contribution (not less than [30] days from notice)

4.3 Failure to Contribute

If a Partner fails to make a required capital call contribution by the deadline (a "Defaulting Partner"), the non-defaulting Partners may, at their election:

(a) Loan to Partnership: Make the Defaulting Partner's share as a loan to the Partnership, which loan shall:

• Bear interest at [___]% per annum (or the maximum rate permitted by Arizona law if lower)
• Be repaid from distributions otherwise payable to the Defaulting Partner
• Be secured by the Defaulting Partner's Partnership Interest

(b) Dilution: Reduce the Defaulting Partner's Percentage Interest proportionally, with corresponding increase to contributing Partners

(c) Forced Buyout: Exercise a buyout of the Defaulting Partner's interest at [___]% of Fair Market Value

4.4 Voluntary Additional Contributions

Any Partner may make voluntary additional Capital Contributions only with the consent of a Majority in Interest. Such contributions shall adjust Percentage Interests as agreed by the Partners.

5. ALLOCATIONS OF PROFITS AND LOSSES

5.1 Allocation of Net Profits

Net Profits for each Fiscal Year shall be allocated among the Partners in proportion to their respective Percentage Interests, except as otherwise required by this Agreement or applicable tax law.

5.2 Allocation of Net Losses

Net Losses for each Fiscal Year shall be allocated among the Partners in proportion to their respective Percentage Interests, except that:

• No Partner shall be allocated losses that would cause such Partner's Capital Account to have a negative balance (to the extent such allocation would violate Treasury Regulations)
• Losses that cannot be allocated to a Partner due to this limitation shall be allocated to the other Partners in proportion to their Percentage Interests

5.3 Capital Accounts

A Capital Account shall be maintained for each Partner in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv). Each Partner's Capital Account shall be:

• Increased by: (i) Capital Contributions; (ii) allocations of Net Profits and other income items
• Decreased by: (i) distributions; (ii) allocations of Net Losses and other deduction items

5.4 Special Allocations

The following special allocations shall be made in the following order of priority:

(a) Qualified Income Offset: If any Partner unexpectedly receives an adjustment, allocation, or distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of income and gain shall be specially allocated to such Partner in an amount sufficient to eliminate the deficit balance as quickly as possible.

(b) Minimum Gain Chargeback: Allocations required by Treasury Regulation Section 1.704-2(f) and (i)(4).

(c) Nonrecourse Deductions: Allocated in proportion to Percentage Interests.

5.5 Tax Allocations

For income tax purposes, each item of income, gain, loss, deduction, and credit shall be allocated among the Partners in the same manner as the corresponding book item is allocated under this Section 5.

5.6 Section 704(c) Allocations

If property is contributed to the Partnership with a Fair Market Value different from its tax basis, allocations of depreciation, amortization, gain, or loss with respect to such property shall be made in accordance with Section 704(c) of the Internal Revenue Code using the [traditional method / traditional method with curative allocations / remedial allocation method].

6. DISTRIBUTIONS

6.1 Timing and Amount

Distributions of Distributable Cash shall be made at such times and in such amounts as determined by the Managing Partner(s), but in no event less frequently than [annually / quarterly / monthly], subject to the Partnership's operational needs and reserve requirements.

6.2 Order of Distributions

Distributions shall be made in the following order of priority:

(a) Return of Capital: First, to the Partners until each Partner has received distributions equal to such Partner's unreturned Capital Contributions;

(b) Preferred Return (if applicable):
☐ Not applicable
☐ Then, to the Partners until each Partner has received a cumulative preferred return of [___]% per annum on unreturned Capital Contributions;

(c) Residual Distributions: Thereafter, to the Partners in proportion to their respective Percentage Interests.

6.3 Withholding

The Partnership is authorized to withhold from any distribution any amount required to be withheld under applicable tax law. Any amount so withheld shall be treated as if it had been distributed to the applicable Partner.

6.4 Distributions in Kind

Distributions may be made in kind (other than cash) only with the consent of a Majority in Interest. Such distributions shall be valued at Fair Market Value as of the distribution date.

6.5 Limitations on Distributions

No distribution shall be made if, after giving effect thereto:

• The Partnership would be unable to pay its debts as they become due in the ordinary course of business; or
• The Partnership's total assets would be less than the sum of its total liabilities

7. TAX MATTERS

7.1 Tax Classification

The Partnership shall be classified as a partnership for federal and state income tax purposes. The Partnership shall not elect to be classified as a corporation or other entity.

7.2 Tax Matters Partner / Partnership Representative

[PARTNER NAME] is designated as the "Tax Matters Partner" (for tax years beginning before January 1, 2018) and the "Partnership Representative" (for tax years beginning on or after January 1, 2018) under the Internal Revenue Code.

The Partnership Representative shall have the authority to:

• Bind the Partnership and the Partners in any audit or tax proceeding
• Make elections under the Bipartisan Budget Act of 2015
• Execute closing agreements and settlements with tax authorities

7.3 Tax Returns and Information

The Partnership shall prepare and file all required federal, state, and local tax returns. Each Partner shall be provided with a Schedule K-1 and any other information necessary for the preparation of such Partner's tax returns within [75] days after the end of each Fiscal Year.

7.4 Tax Elections

The Partnership may make the following tax elections as determined by the Tax Matters Partner / Partnership Representative:

• Section 754 election (adjustment to basis of partnership assets)
• Selection of depreciation methods
• Selection of accounting methods
• Any other elections permitted by law

7.5 Arizona Tax Obligations

The Partnership shall comply with all Arizona tax obligations, including:

• Arizona Transaction Privilege Tax (sales tax) as applicable
• Arizona withholding for nonresident partners under A.R.S. § 43-1091
• Any other applicable state or local taxes

8. MANAGEMENT AND VOTING

8.1 Management Structure

Select one:
☐ Partner-Managed: All Partners shall participate in the management of the Partnership, with each Partner having equal management rights regardless of Percentage Interest
☐ Managing Partner(s): Day-to-day management shall be vested in the Managing Partner(s) designated on Schedule A

8.2 Authority of Managing Partner(s)

The Managing Partner(s) shall have the authority to:

• Conduct the ordinary business operations of the Partnership
• Execute contracts in the ordinary course of business up to $[AMOUNT]
• Open and manage bank accounts
• Hire and terminate employees and independent contractors
• Make decisions regarding day-to-day operations
• Represent the Partnership in dealings with third parties

8.3 Matters Requiring Majority Approval

The following actions require approval of a Majority in Interest:

• Annual budgets and material deviations therefrom
• Contracts or commitments exceeding $[AMOUNT] but less than $[LARGER AMOUNT]
• Hiring of key employees with annual compensation exceeding $[AMOUNT]
• Capital expenditures exceeding $[AMOUNT]
• Selection and termination of accountants and auditors
• Tax elections (other than those specifically delegated)

8.4 Matters Requiring Supermajority or Unanimous Approval

The following actions require the approval specified:

Supermajority (66.67%) Approval:

• Contracts or commitments exceeding $[AMOUNT]
• Acquisition or disposition of real property
• Borrowing in excess of $[AMOUNT]
• Admission of new Partners
• Amendment of this Agreement (except as otherwise specified)

Unanimous Approval:

• Change in the Partnership's primary business purpose
• Voluntary dissolution of the Partnership
• Merger or consolidation with another entity
• Any act that would make it impossible to carry on the Partnership's business
• Any amendment to voting thresholds or Percentage Interests

8.5 Voting

Each Partner's voting power shall be proportional to such Partner's Percentage Interest. Voting may occur at meetings or by written consent.

8.6 Compensation of Managing Partner(s)

☐ The Managing Partner(s) shall receive no compensation for management services
☐ The Managing Partner(s) shall receive compensation as follows: [DESCRIBE COMPENSATION - e.g., annual fee, percentage of profits, etc.]

Reimbursement of reasonable out-of-pocket expenses incurred on Partnership business shall be made regardless of compensation.

9. PARTNER MEETINGS

9.1 Annual Meetings

The Partners shall hold an annual meeting within [90] days after the end of each Fiscal Year at a time and place determined by the Managing Partner(s) to review:

• Financial performance of the prior Fiscal Year
• Business plan and budget for the current Fiscal Year
• Any other matters requiring Partner approval

9.2 Special Meetings

Special meetings may be called by:

• The Managing Partner(s); or
• Partners holding at least [25]% of the aggregate Percentage Interests

Notice of special meetings shall be provided at least [10] days in advance and shall state the purpose(s) of the meeting.

9.3 Notice

Notice of meetings shall be given by email, mail, or other agreed method at least [10] days prior to the meeting (or [5] days for emergency meetings). Notice shall include the date, time, place, and agenda.

9.4 Quorum

A quorum for any meeting shall consist of Partners holding at least [majority / 50%] of the aggregate Percentage Interests, present in person, by telephone, or by proxy.

9.5 Action by Written Consent

Any action that may be taken at a meeting may be taken without a meeting if a written consent setting forth the action is signed by Partners holding the requisite Percentage Interests for such action.

9.6 Minutes

Minutes of all meetings shall be kept and made available to all Partners.

10. DUTIES AND OBLIGATIONS OF PARTNERS

10.1 General Duties

Each Partner shall:

• Devote such time and attention to Partnership business as reasonably necessary
• Act in good faith in all matters relating to the Partnership
• Comply with all applicable laws in conducting Partnership business
• Cooperate with other Partners in pursuit of Partnership purposes

10.2 Services

☐ No Service Requirement: Partners are not required to perform services for the Partnership beyond participating in major decisions
☐ Service Requirements: Partners shall provide services as follows:
| Partner | Services/Responsibilities | Time Commitment |
|---------|--------------------------|-----------------|
| [PARTNER A] | [DESCRIBE] | [HOURS/WEEK or %] |
| [PARTNER B] | [DESCRIBE] | [HOURS/WEEK or %] |

10.3 Outside Activities

☐ Partners may engage in other business activities without restriction, provided such activities do not violate the non-competition provisions of Section 27
☐ Partners must devote their full business time and attention to the Partnership and may not engage in other business activities without approval

10.4 Partnership Opportunities

Any business opportunity that falls within the scope of the Partnership's business purpose and comes to any Partner in their capacity as a Partner shall first be offered to the Partnership. Only if the Partnership declines (by Majority in Interest approval) may the Partner pursue such opportunity individually.

11. FIDUCIARY DUTIES

11.1 Duty of Loyalty

Each Partner owes a duty of loyalty to the Partnership and the other Partners, which includes:

• Accounting to the Partnership for any benefit derived in the conduct of Partnership business or from use of Partnership property
• Refraining from dealing with the Partnership as or on behalf of a party with an adverse interest
• Refraining from competing with the Partnership in the conduct of Partnership business (subject to Section 27)

11.2 Duty of Care

Each Partner's duty of care to the Partnership is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or knowing violations of law.

11.3 Good Faith and Fair Dealing

Each Partner shall discharge their duties consistently with the obligation of good faith and fair dealing.

11.4 Modification of Fiduciary Duties

Pursuant to A.R.S. § 29-1003(b), the fiduciary duties described above may be modified by this Agreement, but:

• The duty of loyalty may not be eliminated entirely
• The duty of care may not be reduced below gross negligence
• The obligation of good faith and fair dealing may not be eliminated

11.5 Reliance

A Partner may rely in good faith on information, opinions, reports, or statements provided by other Partners, employees, professionals, or experts.

12. REPRESENTATIONS AND WARRANTIES

Each Partner represents and warrants to the Partnership and to each other Partner as follows:

12.1 Authority and Capacity

Such Partner has full legal capacity and authority to enter into this Agreement and to perform their obligations hereunder.

12.2 No Conflict

The execution and performance of this Agreement does not and will not:

• Violate any law or regulation applicable to such Partner
• Conflict with or result in a breach of any agreement to which such Partner is a party
• Require the consent of any third party

12.3 Investment Intent

Such Partner is acquiring their Partnership Interest for investment purposes only and not with a view to distribution or resale.

12.4 Sophistication

Such Partner is a sophisticated investor and has such knowledge and experience in financial and business matters that such Partner is capable of evaluating the merits and risks of the investment in the Partnership.

12.5 Access to Information

Such Partner has had access to all information concerning the Partnership that such Partner deems necessary to make an informed decision to invest.

12.6 Accuracy of Information

All information provided by such Partner to the Partnership in connection with this Agreement is true, correct, and complete.

13. COVENANTS AND RESTRICTIONS

13.1 Compliance with Law

The Partnership and each Partner shall comply with all applicable federal, state, and local laws, regulations, and ordinances, including Arizona law.

13.2 Maintenance of Records

The Partnership shall maintain all records required by A.R.S. § 29-1043 and this Agreement.

13.3 Insurance

The Partnership shall maintain insurance as specified in Section 16.

13.4 No Unauthorized Binding

No Partner (other than the Managing Partner(s) acting within the scope of their authority) shall:

• Enter into any contract or commitment on behalf of the Partnership
• Bind the Partnership to any obligation
• Incur any debt or liability on behalf of the Partnership
• Assign, mortgage, or encumber any Partnership property

13.5 Prohibited Actions

Without the required approval under Section 8, no Partner shall:

• Do any act that would make it impossible to carry on the Partnership's business
• Confess a judgment against the Partnership
• Possess Partnership property for non-Partnership purposes
• Assign Partnership property in trust for creditors

14. BOOKS, RECORDS, AND ACCOUNTING

14.1 Books and Records

The Partnership shall maintain at its principal office the following books and records in accordance with A.R.S. § 29-1043:

• A current list of Partners with contact information and Percentage Interests
• Copies of federal, state, and local tax returns for the [5] most recent Fiscal Years
• Copies of this Agreement and all amendments
• Financial statements for the [5] most recent Fiscal Years
• Records of all Capital Contributions and distributions
• Minutes of Partner meetings
• All other records required by law

14.2 Accounting Method

The Partnership shall use the [cash / accrual] method of accounting.

14.3 Financial Statements

The Partnership shall prepare:

• Monthly/Quarterly: Unaudited financial statements within [30] days after month/quarter end
• Annual: [Compiled / Reviewed / Audited] financial statements within [90] days after Fiscal Year end

14.4 Partner Inspection Rights

Each Partner shall have the right, upon reasonable notice during normal business hours, to inspect and copy Partnership books and records. Inspection may be conducted by the Partner or the Partner's agent or attorney.

14.5 Accountants

The Partnership shall engage [ACCOUNTING FIRM NAME] (or such other certified public accountants as approved by a Majority in Interest) to prepare tax returns and perform such other accounting services as the Partnership may require.

15. BANKING AND FUNDS

15.1 Partnership Accounts

All Partnership funds shall be deposited in one or more accounts in the name of the Partnership at financial institutions selected by the Managing Partner(s).

15.2 Authorized Signatories

The following shall be authorized to sign checks and authorize withdrawals on behalf of the Partnership:

• For amounts up to $[AMOUNT]: [Managing Partner(s) / Any Partner]
• For amounts exceeding $[AMOUNT]: [Specify approval requirements]

15.3 Commingling Prohibited

Partnership funds shall not be commingled with the personal funds of any Partner or any other entity.

16. INSURANCE

16.1 Required Insurance

The Partnership shall obtain and maintain the following insurance coverages:

16.2 Additional Insureds

All insurance policies shall name the Partnership and all Partners as additional insureds where applicable.

16.3 Evidence of Insurance

Certificates of insurance shall be maintained at the Partnership's principal office and provided to any Partner upon request.

17. INDEMNIFICATION AND LIABILITY

17.1 Indemnification by Partnership

To the fullest extent permitted by law, the Partnership shall indemnify and hold harmless each Partner, and their respective officers, directors, employees, agents, and representatives, from and against any and all claims, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to:

• The Partner's good faith actions on behalf of the Partnership
• The Partner's status as a Partner
  provided that such Partner acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Partnership.

17.2 Exceptions

No Partner shall be entitled to indemnification for:

• Acts or omissions constituting gross negligence, willful misconduct, or fraud
• Knowing violations of law
• Transactions from which the Partner derived improper personal benefit
• Breaches of fiduciary duty

17.3 Advancement of Expenses

The Partnership shall advance expenses (including attorneys' fees) incurred by a Partner in defending any claim for which indemnification may be sought, provided that the Partner undertakes to repay such amounts if it is ultimately determined that the Partner is not entitled to indemnification.

17.4 Partner Liability

Except as otherwise provided by law or this Agreement, each Partner shall be jointly and severally liable for all obligations and liabilities of the Partnership pursuant to A.R.S. § 29-1036.

17.5 Limitation of Liability Among Partners

No Partner shall be liable to the Partnership or any other Partner for any loss or damage resulting from any act or omission performed or omitted in good faith and reasonably believed to be within the scope of authority conferred by this Agreement, except for:

• Gross negligence or willful misconduct
• Knowing violations of law
• Breaches of this Agreement

17.6 Indemnification by Partners

Each Partner shall indemnify and hold harmless the Partnership and the other Partners from and against any claims, losses, damages, liabilities, costs, and expenses arising out of:

• Such Partner's breach of this Agreement
• Such Partner's gross negligence or willful misconduct
• Any unauthorized act by such Partner purporting to bind the Partnership

18. TRANSFER OF PARTNERSHIP INTERESTS

18.1 General Restriction

No Partner may Transfer all or any portion of such Partner's Partnership Interest except in compliance with this Section 18 and the other provisions of this Agreement.

18.2 Permitted Transfers

A Partner may Transfer their Partnership Interest without consent to:

• A revocable living trust for estate planning purposes, provided the Partner remains the trustee
• A family limited partnership or LLC controlled by the Partner
• Immediate family members (spouse, children, grandchildren)

All other Transfers require the prior written consent of a Supermajority.

18.3 Conditions to Transfer

Any Transfer (whether permitted or approved) is subject to the following conditions:

• Compliance with the Right of First Refusal provisions of Section 19
• The transferee's written agreement to be bound by this Agreement
• Receipt of any required regulatory approvals
• Compliance with applicable securities laws
• Payment by the transferring Partner of all Partnership expenses related to the Transfer
• Delivery of an opinion of counsel (if requested) regarding securities law compliance

18.4 Effect of Transfer

Upon a valid Transfer:

• The transferee shall become a substituted Partner with all rights and obligations
• The transferring Partner shall be released from future obligations (but not obligations accrued prior to Transfer)
• Schedule A shall be amended to reflect the Transfer

18.5 Void Transfers

Any purported Transfer in violation of this Agreement shall be void and of no effect, and the Partnership shall not recognize such Transfer.

18.6 Assignee Rights

A transferee who does not become a substituted Partner (e.g., due to lack of consent) shall be entitled only to receive distributions and allocations attributable to the transferred interest, but shall have no management or voting rights.

19. RIGHT OF FIRST REFUSAL

19.1 Offer Notice

If a Partner desires to Transfer all or any portion of their Partnership Interest to any Person other than a Permitted Transferee (a "Proposed Transfer"), such Partner (the "Offering Partner") shall first deliver written notice (the "Offer Notice") to the Partnership and all other Partners specifying:

• The portion of Partnership Interest proposed to be Transferred
• The identity of the proposed transferee
• The proposed purchase price and other material terms
• Evidence that the proposed transferee is able to consummate the transaction

19.2 Partnership Option

Within [30] days after receipt of the Offer Notice, the Partnership may elect to purchase all (but not less than all) of the offered Partnership Interest at the price and on the terms set forth in the Offer Notice.

19.3 Partner Option

If the Partnership does not exercise its option, the remaining Partners shall have [30] days after expiration of the Partnership's option period to elect to purchase the offered Partnership Interest pro rata (based on their Percentage Interests among electing Partners) at the price and on the terms set forth in the Offer Notice.

19.4 Closing

If the Partnership or Partners exercise the right of first refusal, closing shall occur within [60] days after the election.

19.5 Sale to Third Party

If neither the Partnership nor the Partners exercise the right of first refusal, the Offering Partner may complete the Proposed Transfer to the proposed transferee at the price and on terms no more favorable to the transferee than those set forth in the Offer Notice, provided such Transfer is completed within [90] days after expiration of the option periods.

20. BUYOUT PROVISIONS

20.1 Triggering Events

The buyout provisions of this Section shall apply upon:

• Death of a Partner
• Permanent disability of a Partner
• Bankruptcy or insolvency of a Partner
• Withdrawal of a Partner under Section 21
• Dissociation under Section 22
• Default by a Partner under Section 24

20.2 Purchase Price

(a) Valuation Method:
☐ Agreed Value: The value set forth on Schedule B, updated annually
☐ Formula: [DESCRIBE FORMULA - e.g., multiple of revenues, book value, etc.]
☐ Appraisal: Fair Market Value determined by independent appraisal as provided below

(b) Appraisal Process:
If appraisal is required, each party shall select one appraiser within [15] days. The two appraisers shall select a third appraiser within [15] days. The three appraisers shall determine Fair Market Value within [30] days, and the average of the three appraisals shall be the purchase price.

(c) Discount:
☐ No discount shall apply
☐ A [___]% discount shall apply for minority interests
☐ A [___]% discount shall apply for lack of marketability

20.3 Payment Terms

The purchase price shall be paid as follows:
☐ Lump sum at closing
☐ [___]% at closing; balance in [___] equal monthly installments with interest at [___]%
☐ Other: [SPECIFY]

20.4 Default Buyout

If the buyout is triggered by a Partner's default, the purchase price shall be [___]% of the otherwise applicable purchase price.

21. WITHDRAWAL OF PARTNERS

21.1 Voluntary Withdrawal

☐ Prohibited: No Partner may voluntarily withdraw during the term of the Partnership
☐ Permitted with Notice: A Partner may withdraw upon [___] days' prior written notice

21.2 Effect of Withdrawal

Upon withdrawal, the withdrawing Partner shall:

• Cease to have any management or voting rights
• Be entitled to receive the buyout amount determined under Section 20
• Remain liable for obligations incurred prior to withdrawal

21.3 Wrongful Withdrawal

Withdrawal in violation of this Agreement is wrongful. A wrongfully withdrawing Partner:

• Shall be liable to the Partnership for damages caused by the wrongful withdrawal
• Shall receive the buyout amount minus damages
• Shall not be entitled to any portion of unrealized gains on Partnership assets

22. DISSOCIATION EVENTS

22.1 Dissociation

A Partner shall be dissociated from the Partnership upon the occurrence of any of the following events as provided in A.R.S. § 29-1061:

• The Partner's express will to withdraw as a Partner
• An event agreed to in this Agreement as causing dissociation
• The Partner's expulsion by unanimous vote of the other Partners for:
• Wrongful conduct that adversely and materially affects the Partnership business
• Willful or persistent breach of this Agreement
• Conduct making it not reasonably practicable to carry on business with the Partner
• Judicial determination that the Partner has engaged in wrongful conduct
• The Partner becoming a debtor in bankruptcy
• Death of an individual Partner
• Termination of a Partner that is an entity
• Other events specified in A.R.S. § 29-1061

22.2 Effect of Dissociation

Upon dissociation:

• The dissociated Partner's management and voting rights terminate immediately
• The dissociated Partner's duty of loyalty and duty of care continue only with respect to matters arising before dissociation
• The Partnership shall continue (not dissolve) unless dissolution is required under Section 23

23. DISSOLUTION AND WINDING UP

23.1 Events Causing Dissolution

The Partnership shall dissolve upon the first to occur of the following events pursuant to A.R.S. § 29-1081:

• Unanimous consent of all Partners to dissolve
• The expiration of the Partnership term (if a fixed term was specified)
• Completion of the specific undertaking (if so specified)
• An event making it unlawful for the business to be continued
• Judicial determination that it is not reasonably practicable to carry on the Partnership business
• A Dissolution Event under this Agreement

23.2 Statement of Dissolution

Upon dissolution, the Partnership shall file a Statement of Dissolution with the Arizona Secretary of State pursuant to A.R.S. § 29-1091.

23.3 Winding Up

Upon dissolution, the Partnership shall be wound up by the Managing Partner(s) (or a liquidating trustee if the Managing Partner(s) are unavailable), who shall:

• Collect all Partnership assets
• Pay or make provision for all Partnership debts and obligations
• Distribute remaining assets to Partners as provided below

23.4 Order of Distribution

Partnership assets shall be distributed in the following order:

1. To creditors (including Partners who are creditors) in satisfaction of Partnership liabilities
2. To Partners in respect of their Capital Accounts, until all Capital Accounts are reduced to zero
3. To Partners in proportion to their Percentage Interests

23.5 Distributions in Kind

If Partnership assets include property other than cash, such property shall be valued at Fair Market Value and distributed in kind only with the consent of Partners receiving such property. Any distribution in kind shall be treated as a sale and distribution of the proceeds.

23.6 Deficit Capital Accounts

No Partner shall be required to restore a negative Capital Account balance upon dissolution, except to the extent required by law or this Agreement.

24. DEFAULT AND REMEDIES

24.1 Events of Default

The following shall constitute Events of Default:

• Failure to make a required Capital Contribution within [___] days after written demand
• Material breach of this Agreement that remains uncured [30] days after written notice
• Fraud, embezzlement, or misappropriation of Partnership funds
• Conviction of a felony or crime of moral turpitude
• Any act or omission that would justify expulsion under Section 22
• Voluntary or involuntary bankruptcy

24.2 Remedies

Upon an Event of Default by a Partner (the "Defaulting Partner"), the non-defaulting Partners may, in addition to any other remedies available at law or equity:

• Exercise the buyout right under Section 20 at the default discount
• Seek specific performance or injunctive relief
• Recover damages, including attorneys' fees
• Expel the Defaulting Partner
• Suspend the Defaulting Partner's right to participate in management

24.3 Cumulative Remedies

All remedies under this Agreement are cumulative and not exclusive.

25. DISPUTE RESOLUTION

25.1 Negotiation

Any dispute arising out of or relating to this Agreement shall first be addressed through good faith negotiations between the Partners for a period of [30] days.

25.2 Mediation

If the dispute is not resolved through negotiation, the Partners agree to submit the dispute to non-binding mediation before a mutually acceptable mediator in [Phoenix / Tucson], Arizona.

25.3 Arbitration

If mediation is unsuccessful, any dispute shall be resolved by binding arbitration administered by the American Arbitration Association ("AAA") in accordance with its Commercial Arbitration Rules.

Arbitration Terms:

• Location: [Phoenix / Tucson], Arizona
• Number of Arbitrators: [One / Three]
• Arbitrator Qualifications: Experience in partnership/business law
• Discovery: Limited discovery as permitted by the arbitrator
• Hearing: Within [90] days of arbitrator selection
• Decision: Written decision within [30] days of hearing

25.4 Jury Waiver

TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTNER HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

25.5 Attorneys' Fees

In any dispute arising out of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs from the non-prevailing party.

25.6 Injunctive Relief

Notwithstanding the foregoing, any Partner may seek injunctive or other equitable relief from a court of competent jurisdiction to prevent irreparable harm, without posting bond and without first pursuing mediation or arbitration.

26. CONFIDENTIALITY

26.1 Confidential Information

"Confidential Information" means all non-public information regarding the Partnership, its business, finances, customers, vendors, and strategies, including information provided to or learned by a Partner in their capacity as a Partner.

26.2 Obligations

Each Partner shall:

• Maintain all Confidential Information in strict confidence
• Use Confidential Information only for Partnership purposes
• Not disclose Confidential Information to any third party without consent
• Take reasonable measures to protect Confidential Information

26.3 Exclusions

Confidential Information does not include information that:

• Is or becomes publicly available through no fault of the receiving Partner
• Was known to the Partner prior to disclosure by the Partnership
• Is independently developed without use of Confidential Information
• Is required to be disclosed by law (with prior notice to the Partnership)

26.4 Arizona Uniform Trade Secrets Act

The Partners acknowledge that certain Confidential Information may constitute trade secrets under the Arizona Uniform Trade Secrets Act, A.R.S. § 44-401 et seq., and agree to protect such information accordingly.

26.5 Duration

Confidentiality obligations shall survive the termination of this Agreement and the withdrawal or dissociation of any Partner for a period of [5] years.

27. NON-COMPETITION AND NON-SOLICITATION

27.1 Non-Competition

During the term of this Agreement and for a period of [___] year(s) after a Partner's withdrawal, dissociation, or Transfer of Partnership Interest, such Partner shall not, directly or indirectly:

• Engage in any business that competes with the Partnership within [GEOGRAPHIC SCOPE - e.g., the State of Arizona / Maricopa County / a 50-mile radius of the principal office]
• Own, manage, operate, or have a financial interest in any competing business (except for passive ownership of less than 5% of a publicly traded company)

27.2 Non-Solicitation

During the term of this Agreement and for a period of [___] year(s) thereafter, no Partner shall:

• Solicit, recruit, or hire any employee or contractor of the Partnership
• Solicit or divert any customer or business relationship of the Partnership
• Interfere with the Partnership's relationships with vendors or suppliers

27.3 Reasonableness

The Partners acknowledge that the restrictions in this Section are reasonable and necessary to protect the Partnership's legitimate business interests, and that the time, geographic, and scope limitations are appropriate.

27.4 Modification

If any court determines that the restrictions in this Section are unreasonable or unenforceable, the court is authorized to modify the restrictions to the minimum extent necessary to make them enforceable.

27.5 Injunctive Relief

The Partners acknowledge that a breach of this Section would cause irreparable harm not adequately compensable by monetary damages. Accordingly, the Partnership shall be entitled to injunctive relief without posting bond.

28. GENERAL PROVISIONS

28.1 Entire Agreement

This Agreement, including all Schedules and Exhibits, constitutes the entire agreement among the Partners with respect to the Partnership and supersedes all prior agreements, understandings, and negotiations.

28.2 Amendments

This Agreement may be amended only by a written instrument signed by Partners holding the requisite approval under Section 8.4. Any amendment shall be binding on all Partners.

28.3 Severability

If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the invalid provision shall be reformed to the minimum extent necessary to make it valid and enforceable.

28.4 Waiver

No waiver of any provision or breach of this Agreement shall be effective unless in writing and signed by the waiving party. No waiver shall constitute a waiver of any other provision or subsequent breach.

28.5 Notices

All notices required or permitted under this Agreement shall be in writing and delivered:

• In person (effective upon delivery)
• By certified mail, return receipt requested (effective 5 days after mailing)
• By nationally recognized overnight courier (effective the next Business Day)
• By email with confirmation of receipt (effective upon confirmation)

Notices shall be sent to the addresses set forth on Schedule A or such other address as a Partner may designate in writing.

28.6 Binding Effect

This Agreement shall be binding upon and inure to the benefit of the Partners and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns.

28.7 No Third-Party Beneficiaries

This Agreement is for the sole benefit of the Partners and their permitted successors and assigns. Nothing herein shall confer any rights upon any third party.

28.8 Construction

This Agreement shall be construed without regard to the party that drafted it. Headings are for convenience only and shall not affect interpretation.

28.9 Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one agreement.

28.10 Electronic Signatures

Electronic signatures are valid and binding pursuant to the Arizona Electronic Transactions Act, A.R.S. § 44-7001 et seq.

29. ARIZONA-SPECIFIC PROVISIONS

29.1 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona, including the Arizona Revised Uniform Partnership Act (A.R.S. § 29-1001 et seq.), without regard to conflict of laws principles.

29.2 Forum Selection

Subject to the arbitration provisions of Section 25, any legal action arising out of this Agreement shall be brought exclusively in the state or federal courts located in Maricopa County, Arizona. Each Partner consents to the personal jurisdiction of such courts.

29.3 Statement of Partnership Authority

The Partnership may file a Statement of Partnership Authority with the Arizona Secretary of State pursuant to A.R.S. § 29-1033 to evidence the authority of the Partners or Managing Partner(s) to act on behalf of the Partnership.

29.4 Arizona Transaction Privilege Tax

The Partnership shall register with the Arizona Department of Revenue and comply with all Arizona Transaction Privilege Tax obligations as applicable to the Partnership's business activities.

29.5 Nonresident Partner Withholding

If any Partner is not a resident of Arizona, the Partnership shall withhold Arizona income tax from distributions to such Partner as required by A.R.S. § 43-1091 and related regulations.

29.6 Trade Name Registration

If the Partnership operates under a name other than the legal names of the Partners, the Partnership shall register the trade name pursuant to A.R.S. § 44-1460.

29.7 Workers' Compensation

The Partnership shall maintain workers' compensation insurance as required by Arizona law (A.R.S. § 23-901 et seq.) for all employees.

30. EXECUTION

IN WITNESS WHEREOF, the Partners have executed this General Partnership Agreement as of the Effective Date first written above.

31. SCHEDULES

SCHEDULE A: PARTNERS, CONTRIBUTIONS, AND INTERESTS

SCHEDULE B: AGREED VALUE (Optional - for Buyout Purposes)

Effective Date: _______________
Agreed Partnership Value: $_______________

Annual Review:
The Partners agree to review and update the Agreed Value annually within [60] days after the end of each Fiscal Year.

SCHEDULE C: PROPERTY CONTRIBUTIONS (if applicable)

This General Partnership Agreement is drafted in compliance with the Arizona Revised Uniform Partnership Act, A.R.S. § 29-1001 et seq. Partners are advised to consult with a qualified Arizona attorney before executing this Agreement.