Partnership Agreement - General (Maine)

GENERAL PARTNERSHIP AGREEMENT

STATE OF MAINE

This General Partnership Agreement (this "Agreement") is entered into as of [__/__/____] (the "Effective Date") by and among the undersigned Partners, each identified on Schedule A attached hereto.

The Partners hereby form a general partnership (the "Partnership") pursuant to and in accordance with the Maine Uniform Partnership Act, 31 MRSA Sections 1001 through 1105 (the "Act"), and the following terms and conditions.

RECITALS

A. The Partners desire to associate themselves as a general partnership under the laws of the State of Maine for the purposes set forth herein;

B. Each Partner will make or has made the capital contributions described on Schedule A;

C. The Partners wish to set forth in writing their respective rights, obligations, and duties as partners; and

D. The Partners intend that this Agreement shall govern the internal affairs of the Partnership and, to the fullest extent permitted by 31 MRSA Section 1005, modify or supplement the default provisions of the Act.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners agree as follows:

TABLE OF CONTENTS

1. Definitions
2. Formation; Name; Purpose; Term
3. Capital Contributions; Partnership Interests
4. Allocations; Distributions; Tax Matters
5. Management; Voting; Meetings
6. Representations and Warranties
7. Covenants and Restrictions
8. Books, Records, and Accounting
9. Insurance and Risk Management
10. Indemnification; Limitation of Liability
11. Transfer of Interests; Admission; Withdrawal
12. Dissociation; Dissolution; Winding Up
13. Default and Remedies
14. Risk Allocation
15. Dispute Resolution
16. General Provisions
17. Maine-Specific Provisions
18. Execution

ARTICLE 1. DEFINITIONS

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

"AAA" means the American Arbitration Association.

"Act" means the Maine Uniform Partnership Act, 31 MRSA Sections 1001 through 1105, as amended from time to time.

"Adjusted Capital Account" has the meaning assigned in Section 4.1(c).

"Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies, whether through ownership of voting securities, by contract, or otherwise.

"Agreement" has the meaning set forth in the preamble.

"Capital Account" means, for each Partner, the account maintained in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv), as adjusted pursuant to Section 4.1.

"Capital Contribution" means, for any Partner, the total amount of cash and the agreed fair market value of property (net of liabilities assumed or taken subject to) contributed to the Partnership by such Partner, as initially set forth on Schedule A.

"Code" means the Internal Revenue Code of 1986, as amended, and any successor statute.

"Defaulting Partner" has the meaning set forth in Section 13.1.

"Effective Date" has the meaning set forth in the preamble.

"Fiscal Year" has the meaning set forth in Section 8.1.

"Force Majeure Event" has the meaning set forth in Section 14.2.

"Losses" has the meaning set forth in Section 10.1.

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

"MRSA" means the Maine Revised Statutes Annotated, as amended from time to time.

"MRS" means Maine Revenue Services.

"Net Profits" and "Net Losses" mean, for each Fiscal Year (or other relevant period), the Partnership's taxable income or loss as determined for federal income tax purposes, with the adjustments required by Treasury Regulation Section 1.704-1(b)(2)(iv).

"Non-Defaulting Partner" has the meaning set forth in Section 13.2.

"Partner" means each Person identified as a partner on Schedule A and any Person subsequently admitted as a partner pursuant to this Agreement.

"Partnership" has the meaning set forth in the preamble.

"Partnership Interest" means the entire ownership interest of a Partner in the Partnership, including such Partner's economic interest, right to participate in management, and all other rights and obligations under this Agreement and the Act.

"Partnership Representative" has the meaning set forth in Section 4.5.

"Percentage Interest" means, for any Partner, the percentage set forth opposite such Partner's name on Schedule A, as amended from time to time in accordance with this Agreement.

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

"Secretary of State" means the Maine Secretary of State.

"Statement of Partnership Authority" means the statement filed with the Secretary of State pursuant to 31 MRSA Section 1003.

"Transfer" means any sale, assignment, pledge, hypothecation, encumbrance, gift, or other direct or indirect disposition or transfer, whether voluntary or involuntary, by operation of law or otherwise.

"Treasury Regulations" means the regulations promulgated under the Code by the United States Department of the Treasury.

ARTICLE 2. FORMATION; NAME; PURPOSE; TERM

2.1 Formation. The Partnership is hereby formed as a general partnership under the laws of the State of Maine, pursuant to the Act, effective as of the Effective Date. The Partners shall execute and file any documents required by the Act or other applicable Maine law, including a Statement of Partnership Authority with the Secretary of State pursuant to 31 MRSA Section 1003 if the Partners so determine.

2.2 Name. The Partnership shall conduct its business under the name:

[________________________________]

or such other name as the Partners may unanimously approve. The Partnership name shall comply with the requirements of applicable Maine law and shall not imply that the Partnership is formed for a purpose other than the purpose(s) stated in this Agreement.

2.3 Purpose. The purpose of the Partnership is to:

[________________________________]

and to engage in any and all lawful activities incidental or ancillary thereto as the Partners may from time to time agree.

2.4 Principal Office. The principal office of the Partnership shall be located at:

[________________________________]
[________________________________]
[________________________________]

or at such other place within the State of Maine as the Partners may from time to time determine by Majority Interest vote.

2.5 Registered Agent. The Partnership's registered agent for service of process in the State of Maine shall be:

Name: [________________________________]
Registered Office Address: [________________________________]
[________________________________]

The registered agent must be (i) a Maine resident individual whose business office is identical with the registered office, (ii) a domestic entity that has a place of business identical with the registered office, or (iii) a foreign entity authorized to do business in Maine with a place of business identical with the registered office. Changes to the registered agent shall be filed with the Secretary of State.

2.6 Term. The Partnership shall commence on the Effective Date and shall continue:

☐ At will, until dissolved in accordance with Article 12 of this Agreement or the Act.

☐ For a definite term ending on [__/__/____], unless sooner dissolved in accordance with Article 12 of this Agreement or the Act.

☐ Until the completion of the following particular undertaking: [________________________________], unless sooner dissolved in accordance with Article 12 of this Agreement or the Act.

2.7 Statement of Partnership Authority. The Partners may authorize the filing of a Statement of Partnership Authority with the Secretary of State pursuant to 31 MRSA Section 1003. Such statement may include:

(a) The name of the Partnership;
(b) The street address of the Partnership's chief executive office and of one office in the State, if there is one;
(c) The names and mailing addresses of all Partners or of an agent appointed and maintained by the Partnership for the purpose of maintaining a list of the Partners;
(d) The names of Partners authorized to execute instruments transferring real property held in the name of the Partnership; and
(e) Such other matters as the Partners may determine.

☐ The Partners authorize filing of a Statement of Partnership Authority.

☐ The Partners elect not to file a Statement of Partnership Authority at this time.

ARTICLE 3. CAPITAL CONTRIBUTIONS; PARTNERSHIP INTERESTS

3.1 Initial Capital Contributions. Each Partner shall make the initial Capital Contribution set forth opposite such Partner's name on Schedule A on or before the Effective Date (or such later date as specified on Schedule A). Contributions may be made in cash or in property valued at the agreed fair market value as set forth on Schedule A.

3.2 Additional Contributions.

(a) No Partner shall be required to make additional Capital Contributions without such Partner's prior written consent.

(b) If the Partners determine by unanimous vote that additional capital is necessary for the Partnership's operations, the Partners shall have the right (but not the obligation) to make additional Capital Contributions pro rata in accordance with their Percentage Interests.

(c) A Partner who fails to make an additional Capital Contribution when due, after having agreed to do so, shall be subject to the remedies set forth in Section 13.1.

(d) Schedule A shall be amended to reflect any additional Capital Contributions made by the Partners.

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

(a) Increased by (i) the amount of cash contributed by such Partner, (ii) the agreed fair market value of property contributed by such Partner (net of liabilities assumed), and (iii) allocations of Net Profits to such Partner; and

(b) Decreased by (i) the amount of cash distributed to such Partner, (ii) the agreed fair market value of property distributed to such Partner (net of liabilities assumed), and (iii) allocations of Net Losses to such Partner.

3.4 Interest on Capital. No Partner shall be entitled to interest on any Capital Contribution or Capital Account balance.

3.5 Withdrawal of Capital. Except as expressly provided in this Agreement, no Partner may withdraw any part of its Capital Contribution or Capital Account balance without the unanimous written consent of all Partners.

3.6 No Priority. Except as specifically provided in this Agreement, no Partner shall have priority over any other Partner with respect to the return of Capital Contributions or distributions.

ARTICLE 4. ALLOCATIONS; DISTRIBUTIONS; TAX MATTERS

4.1 Allocation of Net Profits and Net Losses.

(a) Profits. Net Profits for each Fiscal Year shall be allocated to the Partners in proportion to their respective Percentage Interests.

(b) Losses. Net Losses for each Fiscal Year shall be allocated to the Partners in proportion to their respective Percentage Interests; provided, however, that Net Losses shall not be allocated to any Partner to the extent that such allocation would cause or increase a deficit balance in such Partner's Capital Account.

(c) Adjusted Capital Accounts. Capital Accounts shall be adjusted to reflect the allocations described herein and to comply with Treasury Regulation Section 1.704-1(b)(2)(iv) (the "Adjusted Capital Account").

(d) Regulatory Allocations. The following special allocations shall be made in the following order of priority:

(i) Minimum Gain Chargeback. If there is a net decrease in Partnership minimum gain during any Fiscal Year, each Partner shall be specially allocated items of income and gain in accordance with Treasury Regulation Sections 1.704-2(f) and 1.704-2(i)(4).

(ii) 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 Partnership income and gain shall be specially allocated to such Partner to eliminate the deficit balance in such Partner's Capital Account as quickly as possible.

4.2 Distributions.

(a) Cash available for distribution shall be distributed to the Partners at such times and in such amounts as determined by a Majority Interest vote, pro rata in accordance with their respective Percentage Interests.

(b) 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.

(c) A Partner has no right to receive a distribution in any form other than cash, except as otherwise provided in Section 12.5 or with unanimous consent.

4.3 Tax Allocations. Items of Partnership income, gain, loss, deduction, and credit shall be allocated among the Partners for federal, state, and local income tax purposes in accordance with the allocations of Net Profits and Net Losses set forth in Section 4.1, except as otherwise required by Code Section 704(c) and the Treasury Regulations thereunder.

4.4 Withholding. The Partnership is authorized to withhold from distributions, or with respect to allocations, to a Partner and to pay over to any federal, state, or local government any amounts required to be withheld pursuant to the Code, Maine law, or any other applicable provision of law. Any amounts so withheld shall be treated as distributions to the relevant Partner.

4.5 Partnership Representative. The following Partner is designated as the "Partnership Representative" within the meaning of Code Section 6223, as amended by the Bipartisan Budget Act of 2015:

Name: [________________________________]

(a) The Partnership Representative shall have the authority to act on behalf of the Partnership in all tax proceedings and audits before the Internal Revenue Service and Maine Revenue Services.

(b) The Partnership Representative shall promptly notify all Partners of any administrative adjustment request or notice of any proceeding.

(c) If an election under Code Section 6226 (the "push-out" election) is available, the Partnership Representative shall make such election upon the written request of a Majority Interest of the Partners.

4.6 Tax Returns and Elections.

(a) The Partnership shall prepare and timely file all required federal and state (including Maine) tax returns.

(b) All elections required or permitted to be made by the Partnership under the Code or Maine law shall be made by the Partnership Representative with the consent of a Majority Interest of the Partners.

(c) The Partnership shall furnish to each Partner a Schedule K-1 (or equivalent) and any applicable Maine tax information within seventy-five (75) days after the end of each Fiscal Year.

ARTICLE 5. MANAGEMENT; VOTING; MEETINGS

5.1 Management Rights. The Partnership shall be managed collectively by the Partners. Each Partner shall have equal rights in the management and conduct of the Partnership's business, pursuant to 31 MRSA Section 1021(6). Unless otherwise specified in this Agreement, any decision or action relating to the ordinary course of business requires the affirmative vote or consent of Partners holding a Majority Interest.

5.2 Managing Partner. The Partners may designate one or more Partners as "Managing Partner(s)" to oversee day-to-day operations:

☐ Managing Partner designated: [________________________________]

☐ No Managing Partner designated; all Partners share management equally.

The Managing Partner shall have authority to:

(a) Execute contracts in the ordinary course of business not exceeding $[____] individually or $[____] in the aggregate per Fiscal Year;
(b) Hire and supervise employees and independent contractors;
(c) Maintain Partnership bank accounts and make ordinary disbursements;
(d) Manage the Partnership's compliance with applicable Maine laws and filing requirements.

5.3 Major Decisions. The following actions require the unanimous written consent of all Partners:

(a) Amendment or modification of this Agreement;
(b) Admission of a new Partner;
(c) Sale, lease, exchange, or other disposition of all or substantially all of the Partnership's assets outside the ordinary course of business;
(d) Merger, conversion, or domestication of the Partnership;
(e) Voluntary dissolution of the Partnership;
(f) Incurring indebtedness in excess of $[____];
(g) Making any capital expenditure in excess of $[____];
(h) Entering into any agreement or transaction with an Affiliate of any Partner;
(i) Filing or settlement of any lawsuit or claim involving an amount in excess of $[____];
(j) Any act that would make it impossible to carry on the ordinary business of the Partnership.

5.4 Meetings.

(a) Regular Meetings. The Partners shall hold regular meetings at least [quarterly/annually] at the principal office or such other place as the Partners may agree.

(b) Special Meetings. Any Partner may call a special meeting upon at least five (5) business days' prior written notice to all other Partners, specifying the date, time, place, and purpose of the meeting.

(c) Telephonic/Electronic Participation. Partners may participate in meetings by telephone, video conference, or other electronic means through which all participants can simultaneously hear one another, and such participation shall constitute presence in person.

5.5 Quorum. Partners holding a Majority Interest, present in person, by proxy, or by electronic means, shall constitute a quorum for the transaction of business at any meeting.

5.6 Action Without Meeting. Any action that may be taken at a meeting of the Partners may be taken without a meeting if written consent setting forth the action to be taken is signed by Partners holding the requisite Percentage Interest required for such action.

5.7 Voting. Each Partner shall be entitled to vote in proportion to such Partner's Percentage Interest.

5.8 Minutes. Written minutes of each meeting shall be prepared and maintained as part of the Partnership's records.

ARTICLE 6. REPRESENTATIONS AND WARRANTIES

Each Partner represents and warrants to the other Partners and to the Partnership as of the Effective Date and on each date on which such Partner acquires an additional interest in the Partnership:

6.1 Capacity and Authority. Such Partner has full legal right, power, and authority to execute, deliver, and perform this Agreement. If such Partner is an entity, it is duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation.

6.2 Enforceability. This Agreement constitutes the legal, valid, and binding obligation of such Partner, enforceable against such Partner in accordance with its terms, subject to applicable bankruptcy, insolvency, and similar laws affecting creditors' rights generally.

6.3 No Conflict. The execution, delivery, and performance of this Agreement by such Partner do not and will not (a) violate any applicable law, (b) conflict with any agreement to which such Partner is a party, or (c) require any third-party consent that has not been obtained.

6.4 Investment Purpose. Such Partner is acquiring its Partnership Interest for its own account, for investment purposes only, and not with a view to distribution or resale.

6.5 Sophistication. Such Partner has had the opportunity to consult with independent legal, tax, and financial advisers and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its investment in the Partnership.

6.6 Information. Such Partner has reviewed all information it considers necessary or appropriate for evaluating the Partnership and its investment therein.

6.7 Maine Compliance. Such Partner is familiar with the requirements of the Act and other applicable Maine laws and agrees to comply therewith.

6.8 Survival. The representations and warranties in this Article 6 shall survive the execution of this Agreement for the duration of the Partnership.

ARTICLE 7. COVENANTS AND RESTRICTIONS

7.1 Compliance with Law. The Partnership and each Partner shall comply in all material respects with all applicable federal, state (including Maine), and local laws, rules, regulations, and ordinances in connection with the Partnership's business.

7.2 Good Faith and Fair Dealing. Each Partner shall discharge its duties and obligations under this Agreement consistent with the obligation of good faith and fair dealing as set forth in 31 MRSA Section 1024.

7.3 Duty of Loyalty. Each Partner acknowledges and agrees to the duty of loyalty as set forth in 31 MRSA Section 1024(2), which includes:

(a) To account to the Partnership and hold as trustee for it any property, profit, or benefit derived by the Partner in the conduct and winding up of the Partnership business or derived from a use by the Partner of Partnership property;

(b) To refrain from dealing with the Partnership in the conduct or winding up of the Partnership business as or on behalf of a party having an interest adverse to the Partnership; and

(c) To refrain from competing with the Partnership in the conduct of the Partnership business before the dissolution of the Partnership.

7.4 Non-Compete. During the term of the Partnership and for a period of [____] months following a Partner's withdrawal or dissociation, no Partner shall, directly or indirectly, engage in, own, manage, operate, control, or participate in any business that is competitive with the Partnership's business within the following geographic area:

[________________________________]

This restriction shall apply only to the extent enforceable under Maine law.

7.5 Confidentiality.

(a) Each Partner shall hold in strict confidence all proprietary, financial, and business information of the Partnership ("Confidential Information") and shall not disclose any Confidential Information to any third party without the prior written consent of a Majority Interest, except as required by law.

(b) This obligation shall survive the termination of this Agreement and any Partner's dissociation from the Partnership for a period of [____] years.

7.6 Non-Solicitation. During the term of the Partnership and for [____] months thereafter, no Partner shall solicit or attempt to solicit any customer, client, supplier, or employee of the Partnership for competitive purposes without the prior written consent of a Majority Interest.

7.7 Devotion of Time. Unless otherwise agreed in writing, each Partner shall devote such time and attention to the Partnership's business as is reasonably necessary for the proper conduct of its affairs.

7.8 Notice of Material Matters. Each Partner shall promptly notify the other Partners in writing of (a) any material breach or default under this Agreement, (b) any material adverse change in the Partnership's business, and (c) any pending or threatened litigation against the Partnership.

ARTICLE 8. BOOKS, RECORDS, AND ACCOUNTING

8.1 Fiscal Year. The fiscal year of the Partnership (the "Fiscal Year") shall end on:

☐ December 31 of each year.

☐ [________________________________] of each year.

8.2 Method of Accounting. The Partnership's books and records shall be maintained on the:

☐ Cash basis of accounting.

☐ Accrual basis of accounting.

in accordance with generally accepted accounting principles (GAAP) consistently applied, or such other method as may be required by the Code.

8.3 Books and Records. The Partnership shall maintain at its principal office complete and accurate books and records, including:

(a) A current list of the full name and last known mailing address of each Partner;
(b) A copy of this Agreement and any amendments thereto;
(c) Copies of the Partnership's federal and Maine tax returns for the three (3) most recent Fiscal Years;
(d) Copies of any Statement of Partnership Authority, Statement of Dissociation, and Statement of Dissolution filed with the Secretary of State;
(e) Financial statements for the three (3) most recent Fiscal Years; and
(f) Minutes of all Partnership meetings and records of all actions taken by the Partners.

8.4 Inspection Rights. Each Partner and its duly authorized representative may, upon reasonable written notice and during normal business hours, inspect, examine, and copy, at such Partner's expense, any of the Partnership's books and records, consistent with 31 MRSA Section 1023.

8.5 Financial Reports. The Partnership shall provide to each Partner:

(a) Within ninety (90) days after the end of each Fiscal Year, an annual financial statement including a balance sheet, income statement, and statement of cash flows;

(b) Within forty-five (45) days after the end of each calendar quarter, a quarterly summary of Partnership operations and financial condition; and

(c) Such other financial information as a Partner may reasonably request.

8.6 Bank Accounts. All Partnership funds shall be deposited in one or more bank accounts in the Partnership's name at financial institutions selected by the Partners. Withdrawals from such accounts shall require the signature of at least [____] Partner(s) or such authorized Person(s) as the Partners may designate.

8.7 Independent Accountant. The Partners may engage an independent certified public accountant to audit or review the Partnership's financial statements annually. The cost of such engagement shall be a Partnership expense.

ARTICLE 9. INSURANCE AND RISK MANAGEMENT

9.1 Required Insurance Policies. The Partnership shall obtain and maintain, at its expense, the following insurance coverage with financially sound and reputable insurers:

(a) Commercial General Liability Insurance with per-occurrence limits of not less than $[________________________________] and aggregate limits of not less than $[________________________________];

(b) Commercial Property Insurance covering the Partnership's tangible property against fire, theft, and other customary risks;

(c) Workers' Compensation Insurance as required by Maine law (39-A MRSA Section 401 et seq.), if the Partnership has any employees;

(d) Professional Liability/Errors and Omissions Insurance (if applicable to the Partnership's business), with limits of not less than $[________________________________]; and

(e) Such other insurance as the Partners may determine appropriate for the Partnership's business.

9.2 Additional Insured. Each Partner shall be named as an additional insured on the Partnership's commercial general liability policy to the extent commercially feasible.

9.3 Risk Management. The Partnership shall implement and maintain appropriate risk management policies and procedures consistent with industry standards and applicable Maine law.

9.4 Review of Coverage. The Partners shall review the Partnership's insurance coverage at least annually and adjust such coverage as reasonably necessary.

ARTICLE 10. INDEMNIFICATION; LIMITATION OF LIABILITY

10.1 Mutual Indemnification. Each Partner (the "Indemnifying Partner") shall indemnify, defend, and hold harmless the other Partners, the Partnership, and their respective heirs, executors, administrators, successors, and assigns from and against any and all losses, damages, liabilities, claims, judgments, settlements, penalties, fines, and expenses, including reasonable attorneys' fees and court costs (collectively, "Losses"), arising out of or relating to:

(a) Any breach by the Indemnifying Partner of any representation, warranty, covenant, or obligation under this Agreement;
(b) The Indemnifying Partner's gross negligence or willful misconduct in connection with the Partnership's business; or
(c) Any act or omission by the Indemnifying Partner that is outside the scope of authority granted under this Agreement.

10.2 Partnership Indemnification. The Partnership shall indemnify each Partner against any Losses incurred by such Partner in the ordinary and proper conduct of the Partnership's business or for the preservation of the Partnership's business or property, to the fullest extent permitted by 31 MRSA Section 1021(3).

10.3 Advance of Expenses. The Partnership may, upon approval of a Majority Interest, advance expenses incurred by a Partner in defending any claim, subject to repayment if such Partner is determined not to be entitled to indemnification.

10.4 Limitation of Liability.

(a) No Partner shall be liable to the Partnership or any other Partner for monetary damages for any act or omission in such Partner's capacity as a Partner, except for Losses arising from (i) fraud, (ii) willful misconduct, (iii) a knowing violation of law, or (iv) a transaction from which such Partner derived an improper personal benefit.

(b) The aggregate liability of any Partner under this Agreement shall not exceed:

☐ $[________________________________] (the "Liability Cap").

☐ No cap on liability.

10.5 Exculpation. No Partner shall be personally liable to the Partnership or any other Partner for any action taken or omitted to be taken in good faith reliance upon the records of the Partnership and upon information, opinions, reports, or statements presented by another Partner, an employee, or any professional adviser.

10.6 Third-Party Liability. Each Partner is jointly and severally liable for all obligations of the Partnership under 31 MRSA Section 1026. Nothing in this Agreement shall limit or affect the liability of Partners to third parties under applicable Maine law.

ARTICLE 11. TRANSFER OF INTERESTS; ADMISSION; WITHDRAWAL

11.1 Restrictions on Transfer. No Partner may Transfer all or any portion of its Partnership Interest without:

(a) The prior written consent of Partners holding at least [____]% of the non-transferring Percentage Interests;

(b) Compliance with all applicable federal and state securities laws; and

(c) Receipt by the Partnership of a written opinion of counsel that the Transfer is exempt from registration under applicable securities laws.

11.2 Right of First Refusal.

(a) If a Partner (the "Offering Partner") receives a bona fide written offer from a third party to purchase all or any portion of its Partnership Interest (a "Third-Party Offer"), the Offering Partner shall first provide written notice to the other Partners (the "ROFR Notice"), including a copy of the Third-Party Offer.

(b) The non-offering Partners shall have thirty (30) days from receipt of the ROFR Notice to elect to purchase the offered Partnership Interest on the same terms, pro rata in accordance with their respective Percentage Interests.

(c) If the non-offering Partners do not exercise their right within the thirty (30)-day period, the Offering Partner may consummate the Transfer on terms no more favorable to the third party, provided the Transfer is completed within ninety (90) days.

11.3 Transferable Interest. Consistent with 31 MRSA Section 1042:

(a) The only transferable interest of a Partner in the Partnership is the Partner's share of the profits and losses and the right to receive distributions;

(b) A transfer does not by itself cause the Partner's dissociation or dissolution of the Partnership; and

(c) A transferee is not a Partner and has no right to participate in management.

11.4 Admission of New Partners. New Partners may be admitted only with the unanimous written consent of all existing Partners and upon execution of a joinder agreement in substantially the form attached as Schedule C.

11.5 Withdrawal.

(a) A Partner may voluntarily withdraw from the Partnership upon not less than ninety (90) days' prior written notice to all other Partners.

(b) In a partnership at will, a Partner's withdrawal constitutes dissociation under 31 MRSA Section 1051(1).

(c) In a partnership for a definite term or particular undertaking, a Partner who withdraws before expiration of the term is subject to 31 MRSA Section 1052(2) (wrongful dissociation).

11.6 Purchase Upon Withdrawal. Upon a Partner's withdrawal, the remaining Partners shall have the option to purchase the withdrawing Partner's Partnership Interest at fair market value as determined in accordance with Section 11.7.

11.7 Valuation.

(a) The fair market value shall be determined as of the date of withdrawal, death, or default (the "Valuation Date").

(b) The Partners shall endeavor in good faith to agree upon the fair market value within thirty (30) days. If they cannot agree, an independent appraiser shall determine the value.

(c) The cost of the appraisal shall be borne equally by the withdrawing Partner and the remaining Partners.

ARTICLE 12. DISSOCIATION; DISSOLUTION; WINDING UP

12.1 Events of Dissociation. A Partner is dissociated from the Partnership upon the occurrence of any of the events set forth in 31 MRSA Section 1051, including but not limited to:

(a) The Partnership's having notice of the Partner's express will to withdraw;
(b) An event agreed to in this Agreement as causing dissociation;
(c) The Partner's expulsion pursuant to this Agreement;
(d) The Partner's expulsion by unanimous vote of the other Partners;
(e) The Partner's death or incapacity (if an individual);
(f) The Partner's bankruptcy; or
(g) A judicial determination under 31 MRSA Section 1051(5).

12.2 Effect of Dissociation. Upon dissociation under 31 MRSA Section 1053:

(a) The dissociated Partner's right to participate in management terminates;
(b) The dissociated Partner's duty of loyalty terminates as to future competitive activities; and
(c) The dissociated Partner's duties continue only with regard to pre-dissociation matters.

12.3 Dissolution Events. The Partnership shall dissolve, and its business shall be wound up, only upon the first to occur of the following events, pursuant to 31 MRSA Section 1081:

(a) In a partnership at will, the Partnership's having notice from a Partner of that Partner's express will to withdraw, unless before the end of the ninety (90)-day period following the notice, a majority in interest of the remaining Partners agree to continue the Partnership;

(b) In a partnership for a definite term or particular undertaking:
(i) Within ninety (90) days after a Partner's dissociation by death or otherwise under 31 MRSA Section 1051(6) through (10), the express will of at least half of the remaining Partners to wind up; or
(ii) The expiration of the term or completion of the undertaking;

(c) An event agreed to in this Agreement as causing dissolution;

(d) An event that makes it unlawful for all or substantially all of the Partnership's business to be continued;

(e) Upon application by a Partner, a judicial determination under 31 MRSA Section 1081(5) that:
(i) The economic purpose of the Partnership is likely to be unreasonably frustrated;
(ii) Another Partner has engaged in conduct that makes it not reasonably practicable to carry on the business in partnership with that Partner; or
(iii) It is not otherwise reasonably practicable to carry on the Partnership business in conformity with this Agreement; or

(f) The unanimous written agreement of all Partners.

12.4 Statement of Dissolution. Upon dissolution, the Partnership shall file a Statement of Dissolution with the Secretary of State pursuant to 31 MRSA Section 1085. The filing fee for a Statement of Dissolution is $75.00 (subject to change; verify at maine.gov/sos).

12.5 Winding Up.

(a) Upon dissolution, the Partners who have not wrongfully dissociated may wind up the Partnership's affairs, pursuant to 31 MRSA Section 1083.

(b) During the winding-up period, the Partnership shall:
(i) Collect and liquidate Partnership assets in an orderly manner;
(ii) Pay or make reasonable provision for all Partnership debts and liabilities in the order required by 31 MRSA Section 1087;
(iii) Distribute any surplus to the Partners in accordance with their positive Capital Account balances; and
(iv) Execute and file all documents necessary to terminate the Partnership.

12.6 Continuation After Dissolution Event. The remaining Partners may, by unanimous written agreement within ninety (90) days after a dissolution event, elect to continue the Partnership's business, in which case the interest of the dissociated Partner shall be purchased as set forth in Section 11.6.

ARTICLE 13. DEFAULT AND REMEDIES

13.1 Events of Default. A "Default" occurs if a Partner (the "Defaulting Partner"):

(a) Materially breaches any provision of this Agreement and fails to cure within thirty (30) days after written notice;

(b) Becomes insolvent or unable to pay debts as they become due;

(c) Files a voluntary petition in bankruptcy or is the subject of an involuntary petition not dismissed within sixty (60) days;

(d) Has a receiver, trustee, or custodian appointed for its assets;

(e) Engages in fraud, embezzlement, or criminal conduct relating to the Partnership; or

(f) Is convicted of a felony that materially and adversely affects the Partnership.

13.2 Remedies. Upon a Default, the non-defaulting Partners (the "Non-Defaulting Partners") may:

(a) Suspend the Defaulting Partner's voting and management rights;

(b) Purchase the Defaulting Partner's Partnership Interest at the lesser of fair market value or book value;

(c) Offset damages against amounts otherwise distributable to the Defaulting Partner;

(d) Expel the Defaulting Partner by unanimous vote; or

(e) Pursue any other remedy at law or in equity.

13.3 Cumulative Remedies. The remedies are cumulative and in addition to any other remedies available.

13.4 Attorneys' Fees. The prevailing party in any enforcement action shall be entitled to reasonable attorneys' fees and costs.

ARTICLE 14. RISK ALLOCATION

14.1 Insurance. See Article 9.

14.2 Force Majeure. Neither the Partnership nor any Partner shall be liable for any failure or delay in performing any obligation under this Agreement (other than an obligation to pay money) if such failure or delay results from any cause beyond the reasonable control of such party, including but not limited to natural disasters, acts of God, fire, flood, ice storms, blizzards, epidemic or pandemic, war, terrorism, labor disputes, governmental actions, or disruption of utilities or transportation (each, a "Force Majeure Event"); provided that:

(a) The affected party gives prompt written notice;
(b) The affected party uses commercially reasonable efforts to mitigate; and
(c) The affected party resumes performance as soon as reasonably practicable.

14.3 Mitigation. Each party shall use commercially reasonable efforts to mitigate any Losses.

ARTICLE 15. DISPUTE RESOLUTION

15.1 Negotiation. The Partners shall first attempt in good faith to resolve any Dispute by negotiation within thirty (30) days after delivery of a written Dispute Notice.

15.2 Mediation. If the Dispute is not resolved within thirty (30) days, the Partners shall submit the Dispute to non-binding mediation administered by the AAA under its Commercial Mediation Procedures. The mediation shall take place in [________________________________], Maine.

15.3 Mandatory Arbitration. If not resolved through mediation within sixty (60) days, the Dispute shall be submitted to binding arbitration administered by the AAA under its Commercial Arbitration Rules. The arbitration shall be conducted as follows:

(a) Seat. The seat of arbitration shall be [________________________________], Maine.

(b) Arbitrator. One (1) arbitrator with at least ten (10) years of experience in partnership or commercial disputes.

(c) Award. The arbitrator shall issue a reasoned written award within thirty (30) days after the close of the hearing.

(d) Governing Law. The arbitrator shall apply Maine law.

15.4 Injunctive Relief and Exclusive Jurisdiction.

(a) Any Partner may seek injunctive relief in the state or federal courts located in [________________________________] County, Maine (the "Exclusive Jurisdiction Courts").

(b) Each Partner waives any objection to venue or personal jurisdiction in the Exclusive Jurisdiction Courts.

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

15.6 Confidentiality of Proceedings. All mediation and arbitration proceedings shall be confidential.

15.7 Enforcement of Award. Judgment on the arbitral award may be entered in any court of competent jurisdiction.

ARTICLE 16. GENERAL PROVISIONS

16.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Maine, including the Act (31 MRSA Sections 1001 through 1105), without regard to conflicts-of-law principles.

16.2 Amendments. This Agreement may be amended only by a written instrument executed by all Partners.

16.3 Waiver. No failure or delay in exercising any right shall operate as a waiver thereof.

16.4 Entire Agreement. This Agreement (including the Schedules) constitutes the entire agreement among the Partners and supersedes all prior agreements.

16.5 Severability. If any provision is held invalid, the remaining provisions shall remain in full force and effect.

16.6 Successors and Assigns. This Agreement shall bind and benefit the Partners and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns.

16.7 Notices. All notices shall be in writing and deemed given upon:

(a) Personal delivery (upon receipt);
(b) Delivery by overnight courier (one (1) business day after deposit);
(c) Email with confirmed receipt (upon confirmation during business hours); or
(d) Certified mail, return receipt requested (three (3) business days after deposit).

All notices shall be addressed to the Partner at the address on Schedule A.

16.8 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts. Electronic signatures shall be binding.

16.9 Interpretation. Headings are for convenience only. "Including" means "including without limitation." References to statutes include amendments and successor legislation.

16.10 No Third-Party Beneficiaries. Nothing in this Agreement is intended to confer rights on any Person other than the Partners.

16.11 Further Assurances. Each Partner shall execute such additional documents as may be reasonably necessary to effectuate this Agreement.

16.12 Construction. No provision shall be construed against any Partner solely because that Partner drafted it.

ARTICLE 17. MAINE-SPECIFIC PROVISIONS

17.1 Governing Statute. This Agreement is governed by the Maine Uniform Partnership Act, codified at 31 MRSA Chapter 17, Sections 1001 through 1105 (the "Act"). Maine adopted a version of the Revised Uniform Partnership Act (RUPA) with Maine-specific modifications. To the extent any provision of this Agreement conflicts with a mandatory provision of the Act, the Act shall control.

17.2 Non-Waivable Provisions (31 MRSA Section 1005). The partnership agreement may not:

(a) Vary the rights and duties under 31 MRSA Section 1005 except to eliminate the duty to maintain an office in the State;
(b) Unreasonably restrict the right of access to books and records under 31 MRSA Section 1023(2);
(c) Eliminate the duty of loyalty under 31 MRSA Section 1024(2);
(d) Unreasonably reduce the duty of care under 31 MRSA Section 1024(3);
(e) Eliminate the obligation of good faith and fair dealing under 31 MRSA Section 1024(4);
(f) Vary the power to dissociate as a partner under 31 MRSA Section 1052(1), except to require the notice under 31 MRSA Section 1051(1) to specify a term not exceeding 180 days;
(g) Vary the right of a court to expel a partner under 31 MRSA Section 1051(5);
(h) Vary the requirement to wind up the partnership business under 31 MRSA Section 1081; or
(i) Restrict the rights of third parties under the Act.

17.3 Filing Requirements with the Maine Secretary of State.

(a) Statement of Partnership Authority (31 MRSA Section 1003). The Partnership may file a Statement of Partnership Authority with the Secretary of State. The Statement supplements the authority of Partners to enter into transactions on behalf of the Partnership. A Statement granting authority to transfer real property held in the Partnership's name must also be recorded in the registry of deeds for the county where the property is located.

(b) Statement of Denial (31 MRSA Section 1004). Any Partner may file a Statement of Denial with the Secretary of State to deny a fact stated in a Statement of Partnership Authority or to deny the authority of another Partner.

(c) Statement of Dissociation (31 MRSA Section 1064). Upon a Partner's dissociation, the Partnership may file a Statement of Dissociation with the Secretary of State.

(d) Statement of Dissolution (31 MRSA Section 1085). Upon dissolution, the Partnership shall file a Statement of Dissolution with the Secretary of State. For ninety (90) days after the filing, a person not a partner is deemed to have notice of the dissolution.

(e) Filing Standards. Any document delivered to the Secretary of State for filing must satisfy the requirements of 31 MRSA Section 1005. The Secretary of State shall file a document that meets the requirements and return it to the Partnership within five (5) days.

Note: Fees are approximate and subject to change. Verify current fees at maine.gov/sos.

17.4 No Mandatory State-Level Formation Filing.

(a) Under Maine law, a general partnership is formed by the association of two or more persons to carry on as co-owners a business for profit (31 MRSA Section 1011). No formation document need be filed with the Secretary of State to create a general partnership.

(b) The Partnership may, but is not required to, file a Statement of Partnership Authority.

(c) If the Partnership operates under an assumed or fictitious name, check applicable local and county requirements for any assumed name filing obligations.

17.5 Maine Tax Obligations.

(a) No Partnership-Level State Income Tax Return Required. Beginning with the 2012 tax year, Maine partnerships are no longer required to file the former Form 1065ME/1120S-ME with Maine Revenue Services. Partnership income flows through to the individual Partners, who report their distributive shares on their individual Maine income tax returns.

(b) Pass-Through Entity Withholding (Form 941P-ME). If the Partnership has Maine-source income and any nonresident members, the Partnership must file Form 941P-ME (Pass-Through Entity Withholding Return) with Maine Revenue Services. The Partnership must withhold Maine income tax on each nonresident member's share of Maine-source income.

(c) Due Date. Form 941P-ME is due on or before the fifteenth (15th) day of the fourth (4th) month following the close of the taxable year (April 15 for calendar-year partnerships).

(d) Composite Return Option. The Partnership may file a composite income tax return (Form 1040C-ME) on behalf of qualifying nonresident Partners, with the consent of such Partners.

(e) Schedule K-1. The Partnership shall furnish each Partner a federal Schedule K-1 and any applicable Maine withholding information within seventy-five (75) days after the end of each Fiscal Year.

(f) Sales Tax. If the Partnership sells tangible personal property or taxable services in Maine, it must register with Maine Revenue Services and collect and remit Maine sales tax (currently 5.5%).

(g) Service Provider Tax. Maine imposes a service provider tax on certain services. The Partnership should verify whether its services are subject to this tax.

(h) No Entity-Level Income Tax. Maine does not impose a separate entity-level income tax on general partnerships. Income flows through to individual Partners.

17.6 Registered Agent Requirements.

(a) If the Partnership files any statement or document with the Secretary of State, it may need to designate a registered agent in Maine.

(b) The registered agent must maintain a registered office in Maine that is a physical street address.

(c) Changes to the registered agent shall be filed with the Secretary of State.

17.7 Partner Liability Under Maine Law.

(a) Joint and Several Liability. Under 31 MRSA Section 1026, all Partners are jointly and severally liable for all obligations of the Partnership unless otherwise agreed by the claimant or provided by law.

(b) Judgment Enforcement. A judgment against the Partnership is not by itself a judgment against a Partner. A judgment against a Partner may be satisfied from Partnership assets only, unless there is a separate judgment against the Partner individually (31 MRSA Section 1027).

(c) Incoming Partner Liability. A person admitted as a Partner is not personally liable for Partnership obligations incurred before admission, except that such liability may be satisfied from Partnership property (31 MRSA Section 1026(2)).

17.8 Real Property Considerations.

(a) Under 31 MRSA Section 1011, Partnership property may be held in the Partnership's name.

(b) A Statement of Partnership Authority that grants authority to transfer real property must be recorded in the registry of deeds for each county where the Partnership owns real property.

(c) All real property conveyances must comply with Maine recording requirements.

17.9 Seasonal Business Considerations. Maine's economy has significant seasonal industries (tourism, fishing, agriculture). If the Partnership operates a seasonal business, the Partners should consider:

(a) Adjusting distribution schedules to account for seasonal cash flow variations;
(b) Establishing cash reserves during peak seasons to cover off-season expenses; and
(c) Adapting meeting schedules and management obligations to the seasonal nature of the business.

17.10 Contact Information.

ARTICLE 18. EXECUTION

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

PARTNER SIGNATURES

Partner 1:

Name: [________________________________]
Title (if entity): [________________________________]

Signature: ___________________________________________

Date: [__/__/____]

Address: [________________________________]
[________________________________]
[________________________________]

Email: [________________________________]

Partner 2:

Name: [________________________________]
Title (if entity): [________________________________]

Signature: ___________________________________________

Date: [__/__/____]

Address: [________________________________]
[________________________________]
[________________________________]

Email: [________________________________]

Partner 3 (if applicable):

Name: [________________________________]
Title (if entity): [________________________________]

Signature: ___________________________________________

Date: [__/__/____]

Address: [________________________________]
[________________________________]
[________________________________]

Email: [________________________________]

NOTARY ACKNOWLEDGMENT

STATE OF MAINE
COUNTY OF [________________________________]

On this [____] day of [________________________________], 20[____], before me, the undersigned Notary Public in and for said County and State, personally appeared:

[________________________________]
[________________________________]
[________________________________]

personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

Notary Public: ___________________________________________

Printed Name: [________________________________]

My Commission Expires: [__/__/____]

[NOTARY SEAL]

SCHEDULE A

PARTNERS; CAPITAL CONTRIBUTIONS; PERCENTAGE INTERESTS

Total Capital Contributions: $[________________________________]
Total Percentage Interests: 100%

SCHEDULE B

ADDITIONAL PARTNER OBLIGATIONS AND SERVICES

SCHEDULE C

FORM OF JOINDER AGREEMENT

JOINDER TO GENERAL PARTNERSHIP AGREEMENT

The undersigned (the "New Partner") hereby agrees to become a Partner in [________________________________] (the "Partnership") and to be bound by all terms and conditions of the General Partnership Agreement dated [__/__/____] (as amended, the "Agreement"), as if the New Partner were an original signatory thereto.

Capital Contribution: $[________________________________]
Percentage Interest: [____]%
Effective Date of Admission: [__/__/____]

The New Partner makes the representations and warranties set forth in Article 6 of the Agreement as of the date hereof.

NEW PARTNER:

Name: [________________________________]
Signature: ___________________________________________
Date: [__/__/____]
Address: [________________________________]

ACKNOWLEDGED AND ACCEPTED BY EXISTING PARTNERS:

Name: [________________________________]
Signature: ___________________________________________
Date: [__/__/____]

Name: [________________________________]
Signature: ___________________________________________
Date: [__/__/____]

SCHEDULE D

MAINE FILING AND COMPLIANCE CHECKLIST

☐ File Statement of Partnership Authority with Maine Secretary of State (31 MRSA Section 1003) — Fee: ~$35.00 (optional)
☐ File Statement of Partnership Authority in county registry of deeds (if Partnership owns real property)
☐ Obtain Federal Employer Identification Number (EIN) from IRS
☐ Register with Maine Revenue Services for state tax purposes
☐ File Form 941P-ME (Pass-Through Entity Withholding) if Partnership has nonresident Partners with Maine-source income
☐ Furnish Schedule K-1 and Maine tax information to each Partner
☐ Register for Maine sales tax collection (if applicable)
☐ Obtain any required local business licenses and permits
☐ Obtain required insurance coverage (see Article 9)
☐ Comply with Maine workers' compensation requirements (39-A MRSA Section 401 et seq.)
☐ Open Partnership bank account(s)
☐ Check local/county assumed name filing requirements
☐ Record real property transfers in appropriate county registry of deeds

DISCLAIMER: This template is provided for informational purposes only and does not constitute legal advice. This template should be reviewed and customized by a qualified attorney licensed in the State of Maine before use. Laws and regulations are subject to change, and the filing fees and requirements referenced herein should be verified with the Maine Secretary of State and Maine Revenue Services at the time of use. Do not execute this document without professional legal review. Use of this template does not create an attorney-client relationship with the template provider.

Prepared for use on the ezel.ai platform. Last updated: 2026-02-27.