Louisiana Limited Partnership (Partnership in Commendam) Agreement

CONTRACT OF PARTNERSHIP IN COMMENDAM

(LIMITED PARTNERSHIP AGREEMENT)

[________________________________]

A LOUISIANA PARTNERSHIP IN COMMENDAM

Date of Contract: [__/__/____]

Effective Date: [__/__/____]

IMPORTANT NOTICE REGARDING LOUISIANA CIVIL LAW

Louisiana is a civil law jurisdiction. Unlike the forty-nine common law states, Louisiana's legal system is based on the French and Spanish civil law tradition, as codified in the Louisiana Civil Code. The partnership provisions governing this Agreement are found primarily in the Louisiana Civil Code, Title XI, "Of Partnership" (Articles 2801 through 2840), and in the Louisiana Revised Statutes (La. R.S. 9:3401 et seq.) regarding registration requirements. The terminology and legal framework differ significantly from common law limited partnership statutes.

In Louisiana, a "partnership in commendam" is the civil law equivalent of a limited partnership. The "partner in commendam" (also referred to as a "limited partner") has liability limited to the extent of the partner's agreed contribution, while the "general partner" (also referred to as the "managing partner" or "associe gerant") bears unlimited liability for the partnership's obligations.

THIS CONTRACT OF PARTNERSHIP IN COMMENDAM (this "Contract" or "Agreement") is entered into as of the Effective Date set forth above, by and among the parties identified herein as General Partner(s) and Partner(s) in Commendam, and is governed by the Louisiana Civil Code and the Louisiana Revised Statutes.

RECITALS

WHEREAS, the parties hereto desire to form a partnership in commendam (limited partnership) under the laws of the State of Louisiana pursuant to Louisiana Civil Code Articles 2836 through 2840 and related provisions;

WHEREAS, Louisiana Civil Code Article 2837 defines a partnership in commendam as a partnership consisting of one or more general partners who have the powers, rights, and obligations of partners, and one or more partners in commendam whose powers, rights, and obligations are defined in Chapter 4 of Title XI of the Civil Code;

WHEREAS, this Contract shall be filed for registry with the Louisiana Secretary of State in accordance with Louisiana Civil Code Article 2836 and La. R.S. 9:3401 et seq., and until such filing, partners in commendam shall be liable to third persons as general partners pursuant to Louisiana Civil Code Article 2836;

WHEREAS, the General Partner(s) shall have unlimited personal liability for the debts and obligations of the Partnership, and each Partner in Commendam shall be liable only to the extent of such partner's agreed contribution pursuant to Louisiana Civil Code Article 2840;

WHEREAS, the parties desire to set forth their respective rights, duties, obligations, and liabilities as partners of the Partnership, and the terms and conditions governing the management, operation, and termination of the Partnership;

NOW, THEREFORE, in consideration of the mutual obligations and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree and stipulate as follows:

ARTICLE I: DEFINITIONS

Section 1.1 Definitions. As used in this Contract, the following terms shall have the meanings set forth below:

(a) "Agreed Contribution" means the contribution that a Partner in Commendam has agreed to make to the Partnership, as described in Schedule A, including any contribution of money, things, or the performance of nonmanagerial services, and as valued in accordance with Louisiana Civil Code Article 2840.

(b) "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.

(c) "Business Day" means any day other than a Saturday, Sunday, or legal holiday in the State of Louisiana.

(d) "Capital Account" means the capital account maintained for each Partner in accordance with Section 4.4 of this Contract and applicable Treasury Regulations.

(e) "Capital Contribution" means the total amount of cash, the agreed value of any things (movable or immovable property), or the agreed value of any nonmanagerial services contributed or agreed to be contributed by a Partner to the capital of the Partnership.

(f) "Civil Code" means the Louisiana Civil Code, as amended from time to time.

(g) "Code" means the Internal Revenue Code of 1986, as amended.

(h) "Contract" or "Agreement" means this Contract of Partnership in Commendam, as amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.

(i) "Distributable Cash" means, as of the date of determination, the amount of cash on hand or in accounts of the Partnership that the General Partner, in the General Partner's reasonable discretion, determines is available for distribution to the Partners after payment or adequate provision for (i) all current operating expenses, (ii) all outstanding debts and obligations, and (iii) such reserves as the General Partner deems reasonably necessary for contingencies, capital improvements, or other Partnership purposes.

(j) "Fiscal Year" means the fiscal year of the Partnership as determined under Section 9.1.

(k) "General Partner" (Associe Gerant) means any Person named as a general partner in Schedule A attached hereto, and any Person admitted as a general partner of the Partnership in accordance with this Contract, in such Person's capacity as a managing partner of the Partnership, who has the powers, rights, and obligations of a partner as defined in the Louisiana Civil Code.

(l) "Immovable Property" means, under Louisiana law, land and its component parts (buildings, other constructions permanently attached to the ground, standing timber, and unharvested crops or ungathered fruits of immovable things), as defined in Louisiana Civil Code Articles 462-467. This term is the Louisiana civil law equivalent of "real property" in common law jurisdictions.

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

(n) "Movable Property" means, under Louisiana law, all things, whether corporeal or incorporeal, that are not immovables, as defined in Louisiana Civil Code Article 471. This term is the Louisiana civil law equivalent of "personal property" in common law jurisdictions.

(o) "Net Profits" and "Net Losses" mean, for each Fiscal Year or other applicable period, an amount equal to the Partnership's taxable income or loss for such year or period, determined in accordance with Section 703(a) of the Code, with certain adjustments as provided in Section 4.1.

(p) "Partner" means any General Partner or Partner in Commendam.

(q) "Partner in Commendam" (Limited Partner) means any Person named as a partner in commendam in Schedule A attached hereto, and any Person admitted as a partner in commendam of the Partnership in accordance with this Contract, in such Person's capacity as a partner in commendam whose liability is limited to the extent of the agreed contribution pursuant to Louisiana Civil Code Article 2840.

(r) "Partnership" means the partnership in commendam formed pursuant to this Contract and the Louisiana Civil Code.

(s) "Partnership Interest" means a Partner's entire interest in the Partnership, including such Partner's right to share in profits and losses, right to distributions, and all other rights and obligations under this Contract and applicable law.

(t) "Percentage Interest" means, with respect to any Partner, the percentage set forth opposite such Partner's name on Schedule A, as adjusted from time to time in accordance with this Contract.

(u) "Person" means any natural person, partnership, limited liability company, corporation, trust, estate, association, or other juridical entity.

(v) "Secretary of State" means the Louisiana Secretary of State, whose office maintains the Central Registry for Contracts of Partnership pursuant to La. R.S. 9:3401.

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

(x) "Treasury Regulations" means the regulations promulgated by the United States Department of the Treasury under the Code, as amended from time to time.

ARTICLE II: FORMATION AND ORGANIZATION

Section 2.1 Formation. The Partnership is hereby formed as a partnership in commendam (limited partnership) under the laws of the State of Louisiana pursuant to Louisiana Civil Code Articles 2836 through 2840 and related provisions. This Contract shall be executed in writing by all Partners and shall be filed for registry with the Secretary of State in accordance with Louisiana Civil Code Article 2836 and La. R.S. 9:3401 et seq.

Section 2.2 Filing Requirements.

(a) Central Registry Filing. The General Partner shall cause a duly executed original or certified copy of this Contract to be filed for registry with the Secretary of State, Central Registry for Contracts of Partnership, in accordance with La. R.S. 9:3402. Such filing is essential because, pursuant to Louisiana Civil Code Article 2836, until the contract of partnership in commendam is filed for registry with the Secretary of State, partners in commendam are liable to third persons in the same manner as general partners.

(b) Required Content. Pursuant to La. R.S. 9:3403, this Contract filed for registry with the Secretary of State shall contain:

(i) The name and taxpayer identification number of the Partnership;

(ii) The municipal address of the Partnership's principal place of business in Louisiana;

(iii) The name and municipal address of each Partner, including each Partner in Commendam; and

(iv) Such other information as may be required by law.

(c) Louisiana Partnership Registration Form. The General Partner shall complete and file the Louisiana Partnership Registration Form (Form 342) with the Secretary of State, together with all required filing fees.

Section 2.3 Name. The name of the Partnership shall be:

[________________________________]

Pursuant to Louisiana Civil Code Article 2838, for the liability of a Partner in Commendam to be limited as to third persons, the Partnership must have a name that: (a) appears in this Contract; (b) includes language that clearly identifies it as a partnership in commendam, such as the words "limited partnership" or "partnership in commendam"; and (c) does not imply that a Partner in Commendam is a general partner.

The Partnership name shall include the designation:

☐ "Limited Partnership" or "LP" or "L.P."

☐ "Partnership in Commendam"

☐ Other designation compliant with Louisiana Civil Code Article 2838: [________________________________]

Section 2.4 Principal Place of Business. The principal place of business of the Partnership in the State of Louisiana shall be located at:

[________________________________]
[________________________________]
[________________________________], Louisiana [____]

The General Partner may change the principal place of business at any time upon written notice to all Partners and appropriate amendment of the filing with the Secretary of State.

Section 2.5 Registered Agent for Service of Process. The Partnership's agent for service of process in the State of Louisiana shall be:

Name: [________________________________]

Address: [________________________________]
[________________________________]
[________________________________], Louisiana [____]

Section 2.6 Purpose. The purpose of the Partnership shall be to:

[________________________________]
[________________________________]
[________________________________]

and to engage in any and all lawful activities incidental or related thereto as the General Partner may determine from time to time; provided, however, that the Partnership shall not engage in any activity that would cause the Partnership to be treated as an association taxable as a corporation for federal income tax purposes unless the General Partner obtains the prior written consent of a Majority in Interest of the Partners in Commendam.

Section 2.7 Term. The Partnership shall commence on the Effective Date (or, if later, the date this Contract is filed for registry with the Secretary of State) and shall continue in existence until terminated in accordance with Article VIII of this Contract and applicable law.

The parties acknowledge that under Louisiana Civil Code Article 2805, a partnership may be established for a specified term or at the will of any partner. This Partnership:

☐ Is established for a specified term of [________________________________] years, commencing on the Effective Date.

☐ Is established at the will of any partner, subject to the termination provisions set forth in Article VIII.

☐ Is established to last until the accomplishment of the purpose set forth in Section 2.6.

Section 2.8 Title to Partnership Property. Under Louisiana law, a partnership may own property in its own name. All property owned by the Partnership, whether movable or immovable, corporeal or incorporeal, shall be owned by the Partnership as a juridical entity and no Partner shall have any individual ownership interest in any Partnership property. Title to any immovable property shall be acquired and held in the name of the Partnership by authentic act as required by Louisiana Civil Code Article 1839.

Section 2.9 Juridical Personality. In accordance with Louisiana Civil Code Article 2801, a partnership is a juridical person, distinct from its partners, created by a contract between two or more persons to combine their efforts or resources in determined proportions and to collaborate at mutual risk for their common profit or commercial benefit. The Partnership formed hereunder shall have juridical personality separate and apart from its Partners.

Section 2.10 Tax Classification. The Partners intend that the Partnership shall be treated as a partnership for federal and state income tax purposes and not as an association taxable as a corporation. No Partner shall take any action inconsistent with the express intent of the parties hereto.

ARTICLE III: CAPITAL CONTRIBUTIONS

Section 3.1 Nature of Contributions. Pursuant to Louisiana Civil Code Article 2840, a Partner in Commendam must agree to make a contribution to the Partnership. The contribution may consist of money, things (movable or immovable property), or the performance of nonmanagerial services. This Contract shall describe each contribution and state either its agreed value or a method of determining its value, as required by Louisiana Civil Code Article 2840.

Section 3.2 Initial Capital Contributions. Each Partner shall contribute to the capital of the Partnership the Capital Contribution set forth opposite such Partner's name on Schedule A attached hereto. Initial Capital Contributions shall be made in the following manner:

(a) Monetary Contributions. Contributions of money shall be made by wire transfer of immediately available funds to the Partnership's designated bank account, or by certified or cashier's check, no later than [____] Business Days after the Effective Date of this Contract.

(b) Contributions of Things (Property). Contributions of things (movable or immovable property) shall be valued at the agreed value as set forth on Schedule A, as determined by agreement of the contributing Partner and the General Partner. If the parties are unable to agree on the value, an independent appraiser selected by the General Partner shall determine the value, with the cost of such appraisal borne by the Partnership. If the contribution consists of immovable property, the transfer shall be made by authentic act (before a notary public and two witnesses) as required by Louisiana law.

(c) Contributions of Nonmanagerial Services. A Partner in Commendam may contribute services, provided that such services are nonmanagerial in nature, as permitted by Louisiana Civil Code Article 2840. Managerial services by a Partner in Commendam may jeopardize such partner's limited liability. The nature, scope, and agreed value of all service contributions shall be set forth on Schedule A.

Section 3.3 Additional Capital Contributions.

(a) No Partner shall be required to make additional Capital Contributions to the Partnership beyond such Partner's initial Capital Contribution as set forth on Schedule A, except as follows:

☐ Additional contributions may be required upon the affirmative vote of the General Partner and a Majority in Interest of the Partners in Commendam.

☐ Additional contributions may be required at the sole discretion of the General Partner, provided that no individual Partner in Commendam shall be required to contribute more than $[________________________________] in any twelve (12) month period.

☐ No additional contributions shall be required under any circumstances.

(b) Any call for additional Capital Contributions shall be made by written notice to all Partners at least [____] days prior to the date such contributions are due. Each Partner's share of any additional Capital Contribution shall be proportionate to such Partner's Percentage Interest unless otherwise agreed in writing by all Partners.

(c) If any Partner fails to make any required additional Capital Contribution within [____] days after the date such contribution is due, the General Partner may, in the General Partner's sole discretion, pursue one or more of the following remedies:

(i) Treat the defaulting Partner's Percentage Interest as diluted proportionally;

(ii) Permit the non-defaulting Partners to contribute the defaulting Partner's share on a pro rata basis and adjust Percentage Interests accordingly;

(iii) Charge interest on the unpaid amount at the rate of [____]% per annum from the due date until paid (but in no event exceeding the maximum legal rate under Louisiana law); or

(iv) Exercise any other remedies available under this Contract or applicable law.

Section 3.4 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 any money contributed by such Partner to the Partnership, (ii) the agreed value of any things contributed by such Partner to the Partnership (net of liabilities assumed by the Partnership or to which such property is subject), (iii) the agreed value of any nonmanagerial services contributed by such Partner, and (iv) such Partner's share of Net Profits and any items of income or gain specially allocated to such Partner; and

(b) Decreased by (i) the amount of any money distributed to such Partner by the Partnership, (ii) the agreed value of any things distributed to such Partner by the Partnership (net of liabilities assumed by such Partner or to which such property is subject), and (iii) such Partner's share of Net Losses and any items of deduction or loss specially allocated to such Partner.

Section 3.5 No Interest on Capital. No Partner shall be entitled to receive interest on such Partner's Capital Contributions or Capital Account balance, except as otherwise specifically provided in this Contract.

Section 3.6 Return of Capital. Under Louisiana Civil Code Article 2817, a partner is entitled to the return of the things the partner contributed, subject to any damage, loss, or deterioration caused by the partnership's use. However, no Partner shall have the right to demand the return of Capital Contributions prior to the termination and liquidation of the Partnership, except as otherwise provided in this Contract.

Section 3.7 Loans by Partners. Any Partner may, with the prior written consent of the General Partner, make loans to the Partnership. Any such loan shall bear interest at a rate agreed upon by the lending Partner and the General Partner (not to exceed the maximum rate permitted under Louisiana law) and shall be evidenced by a written promissory note. No loan by a Partner shall constitute a Capital Contribution or entitle the lending Partner to any increase in such Partner's Percentage Interest.

ARTICLE IV: ALLOCATIONS AND DISTRIBUTIONS

Section 4.1 Allocation of Net Profits and Net Losses.

(a) General Principle. Louisiana Civil Code Article 2801 provides that a partnership is formed to collaborate at mutual risk for the common profit or commercial benefit of the partners. Under Louisiana Civil Code Article 2811, the partners share the profits and losses of the partnership in the manner agreed upon in the contract of partnership. If the contract is silent, each partner's share is in proportion to the partner's contribution to the partnership. If only the share of profits is determined, the share of losses shall be the same, and vice versa, as provided in Louisiana Civil Code Article 2812.

(b) Net Profits. Except as otherwise provided in this Article IV, Net Profits for each Fiscal Year (or other applicable period) shall be allocated among the Partners in the following order of priority:

(i) First, to the Partners in proportion to and to the extent of their respective shares of Net Losses previously allocated pursuant to Section 4.1(c) that have not been offset by prior allocations of Net Profits under this Section 4.1(b)(i);

(ii) Second, to the Partners in accordance with their respective Percentage Interests.

(c) Net Losses. Except as otherwise provided in this Article IV, Net Losses for each Fiscal Year (or other applicable period) shall be allocated among the Partners in the following order of priority:

(i) First, to the Partners in proportion to and to the extent of their respective positive Capital Account balances;

(ii) Second, to the General Partner.

Section 4.2 Special Allocations.

(a) Minimum Gain Chargeback. Notwithstanding any provision of this Contract to the contrary, if there is a net decrease in Partnership minimum gain (as defined in Treasury Regulation Section 1.704-2(b)(2)) during any Fiscal Year, each Partner shall be allocated items of income and gain for such year (and, if necessary, for subsequent years) in an amount equal to such Partner's share of the net decrease in Partnership minimum gain, determined in accordance with Treasury Regulation Section 1.704-2(g).

(b) Partner Minimum Gain Chargeback. Notwithstanding any provision of this Contract to the contrary (except Section 4.2(a)), if there is a net decrease in partner nonrecourse debt minimum gain (as defined in Treasury Regulation Section 1.704-2(i)(2)) attributable to a partner nonrecourse debt during any Fiscal Year, each Partner who has a share of such partner nonrecourse debt minimum gain shall be allocated items of income and gain for such year (and, if necessary, for subsequent years) in an amount equal to such Partner's share of the net decrease in partner nonrecourse debt minimum gain, determined in accordance with Treasury Regulation Section 1.704-2(i)(4).

(c) Qualified Income Offset. If any Partner unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulation Sections 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 and manner sufficient to eliminate, to the extent required by the Treasury Regulations, any deficit balance in such Partner's Adjusted Capital Account as quickly as possible.

(d) Nonrecourse Deductions. Nonrecourse deductions (as defined in Treasury Regulation Section 1.704-2(b)(1)) for any Fiscal Year shall be allocated among the Partners in accordance with their respective Percentage Interests.

(e) Partner Nonrecourse Deductions. Partner nonrecourse deductions (as defined in Treasury Regulation Section 1.704-2(i)(1)) for any Fiscal Year shall be allocated to the Partner who bears the economic risk of loss for the partner nonrecourse debt to which such deductions are attributable, in accordance with Treasury Regulation Section 1.704-2(i)(1).

(f) Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or Section 743(b) of the Code is required to be taken into account in determining Capital Accounts pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), the amount of such adjustment shall be treated as an item of gain or loss, as the case may be, and shall be specially allocated among the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Treasury Regulation section.

Section 4.3 Prohibition on Leonine Partnership. The parties acknowledge and agree that under Louisiana Civil Code Article 2814, a contract of partnership in which all the profits are allotted to one partner, or in which one partner is excluded from all share in the losses, is absolutely null. This Contract is drafted in compliance with this prohibition.

Section 4.4 Tax Allocations. For federal, state, and local income tax purposes, items of income, gain, loss, deduction, and credit shall be allocated among the Partners in the same manner as their corresponding "book" items are allocated under Sections 4.1 and 4.2, except as otherwise required by Section 704(c) of the Code and the Treasury Regulations thereunder.

Section 4.5 Distributions.

(a) Timing and Amount. Distributions of Distributable Cash shall be made at such times and in such amounts as the General Partner shall determine in the General Partner's reasonable discretion; provided, however, that distributions shall be made at least [________________________________] (e.g., quarterly, annually, or as specified).

(b) Distribution Waterfall. Distributions of Distributable Cash shall be made in the following order of priority:

(i) First, to all Partners in proportion to their respective Percentage Interests until each Partner has received cumulative distributions equal to such Partner's total Capital Contributions (the "Return of Capital");

(ii) Second, to all Partners in proportion to their respective Percentage Interests until each Partner has received a cumulative preferred return equal to [____]% per annum on unreturned Capital Contributions (the "Preferred Return");

(iii) Third, to the General Partner as an incentive allocation equal to [____]% of all remaining Distributable Cash (the "Carried Interest" or "Promote");

(iv) Fourth, the balance to all Partners in accordance with their respective Percentage Interests.

(c) Tax Distributions. Notwithstanding the foregoing, the General Partner shall use commercially reasonable efforts to cause the Partnership to distribute to each Partner, at least fifteen (15) days prior to each estimated tax payment due date, an amount sufficient to enable each Partner to satisfy such Partner's federal and Louisiana state income tax obligations arising from such Partner's allocable share of Partnership income (the "Tax Distribution"). For purposes of calculating Tax Distributions, the applicable tax rate shall be the highest combined marginal federal and Louisiana state income tax rate applicable to individuals for such period.

(d) Limitations on Distributions. No distribution shall be made if, after giving effect to such distribution, the Partnership would be unable to pay its debts as they become due in the ordinary course of the Partnership's business.

(e) Withholding. The General Partner is authorized to withhold from distributions to any Partner amounts required to be withheld under federal, state, or local tax laws, including Louisiana income tax withholding for nonresident Partners under La. R.S. 47:201 et seq. Amounts so withheld shall be treated as distributions to such Partner.

(f) Distributions in Kind. The General Partner may, in the General Partner's sole discretion, make distributions of Partnership property in kind. Any distribution in kind shall be valued at the agreed fair market value as of the date of distribution, and any gain or loss attributable to such property shall be allocated to the Partners as if the property had been sold at such value. Distributions of immovable property shall be effected by authentic act as required by Louisiana law.

ARTICLE V: MANAGEMENT AND OPERATIONS

Section 5.1 General Partner Authority. The General Partner shall have full, exclusive, and complete authority, power, and discretion to manage and control the business, affairs, and property of the Partnership, to make all decisions regarding those matters, and to perform any and all acts customary to or incident to the management of the Partnership's business. Under the Louisiana Civil Code, each general partner is a mandatary (agent) of the partnership for all matters in the ordinary course of its business. Without limiting the generality of the foregoing, the General Partner shall have the power and authority to:

(a) Acquire, hold, manage, improve, operate, sell, exchange, lease, mortgage, pledge, encumber, or otherwise deal with movable and immovable property;

(b) Borrow money and, in connection therewith, execute and deliver promissory notes, mortgages, security interests, and other instruments and documents;

(c) Enter into, perform, and carry out contracts of any kind necessary or incidental to the Partnership's business;

(d) Hire, supervise, and discharge employees, agents, contractors, and consultants;

(e) Open, maintain, and close bank accounts, investment accounts, and other financial accounts at institutions in Louisiana or elsewhere;

(f) File tax returns and make tax elections on behalf of the Partnership;

(g) Commence, defend, settle, or compromise lawsuits and other legal proceedings in any court of the State of Louisiana, any federal court in Louisiana, or any other jurisdiction;

(h) Purchase insurance for the Partnership, its assets, and its Partners, officers, and employees;

(i) Establish reserves for working capital, capital expenditures, debt service, taxes, insurance, and other Partnership obligations;

(j) Execute and file all documents, certificates, and instruments required by law or necessary for the operation of the Partnership, including amendments to the filing with the Secretary of State;

(k) Grant conventional mortgages or pledge agreements on Partnership property, subject to the limitations of Section 5.2;

(l) Execute authentic acts before a Louisiana notary public on behalf of the Partnership where required by law; and

(m) Do and perform all other acts as may be necessary or appropriate to the conduct of the Partnership's business.

Section 5.2 Limitations on General Partner Authority. Notwithstanding Section 5.1, the General Partner shall not, without the prior written consent of a Majority in Interest of the Partners in Commendam, take any of the following actions:

(a) Sell, exchange, lease, or otherwise dispose of all or substantially all of the assets of the Partnership in a single transaction or series of related transactions;

(b) Merge or consolidate the Partnership with any other entity;

(c) Admit additional General Partners to the Partnership;

(d) Amend or modify this Contract, except as provided in Section 11.1;

(e) Cause the Partnership to file a voluntary petition in bankruptcy, make a general assignment for the benefit of creditors, or initiate concursus proceedings;

(f) Incur indebtedness on behalf of the Partnership in excess of $[________________________________] in the aggregate at any time outstanding, except in the ordinary course of business;

(g) Enter into any transaction with the General Partner or any Affiliate of the General Partner, except on terms no less favorable to the Partnership than those that could be obtained from an unrelated third party in an arm's-length transaction;

(h) Confess a judgment against the Partnership;

(i) Transfer or encumber immovable property of the Partnership with a value exceeding $[________________________________] without providing at least [____] days' prior written notice to all Partners in Commendam;

(j) Possess or transfer Partnership property for other than a Partnership purpose; or

(k) Perform any act that would subject any Partner in Commendam to liability as a general partner.

Section 5.3 Duties of the General Partner.

(a) Good Faith Management. The General Partner shall manage the affairs of the Partnership in good faith, using the care of a prudent administrator, and in a manner the General Partner reasonably believes to be in the best interests of the Partnership. The General Partner's duties are analogous to those of a mandatary under Louisiana Civil Code Article 2996 et seq. (Of Mandate).

(b) Fiduciary Obligations. The General Partner owes fiduciary obligations to the Partnership and the Partners in Commendam, including the duty of loyalty, the duty of care, and the duty to act in good faith. The General Partner shall not use Partnership property for personal benefit or engage in self-dealing transactions except as permitted by this Contract.

(c) Duty to Account. The General Partner shall account for all Partnership funds and property and shall not commingle Partnership funds with the General Partner's personal funds or the funds of any other Person.

(d) Obligation of Good Faith. All Partners owe each other the obligation of good faith in the performance of this Contract, in accordance with the general principles of Louisiana obligations law (Louisiana Civil Code Article 1759).

Section 5.4 Compensation of General Partner. The General Partner shall be entitled to receive the following compensation for services rendered to the Partnership:

(a) An annual management fee equal to [____]% of [________________________________] (e.g., gross revenues, total assets, committed capital), payable [________________________________] (e.g., monthly, quarterly);

(b) Reimbursement for all reasonable out-of-pocket expenses incurred by the General Partner in connection with the management and operation of the Partnership's business; and

(c) Such additional compensation as may be approved by a Majority in Interest of the Partners in Commendam.

Section 5.5 Rights and Limitations of Partners in Commendam.

(a) No Management Rights. A Partner in Commendam shall not participate in the management of the Partnership's business. Under Louisiana law, if a Partner in Commendam participates in the management of the partnership, such partner may become liable to third persons as a general partner. This limitation is a fundamental element of the limited liability afforded to partners in commendam under the Louisiana Civil Code.

(b) Use of Name Prohibition. Pursuant to Louisiana Civil Code Article 2839, a Partner in Commendam shall not permit such partner's name to be used in business dealings of the Partnership in a manner that implies that such partner is a general partner. A Partner in Commendam who permits such use of the partner's name becomes liable as a general partner.

(c) Permitted Activities. Notwithstanding the foregoing, a Partner in Commendam shall not be deemed to participate in the management of the Partnership's business solely by reason of:

(i) Consulting with and advising the General Partner on business matters;

(ii) Reviewing and approving the Partnership's financial statements and tax returns;

(iii) Voting on matters specifically submitted for approval by the Partners in Commendam pursuant to this Contract;

(iv) Attending meetings of the Partners;

(v) Bringing a direct or derivative action on behalf of the Partnership;

(vi) Acting as a contractor for, or agent or employee of, the Partnership in a non-management capacity; or

(vii) Contributing nonmanagerial services as permitted by Louisiana Civil Code Article 2840.

(d) Voting Rights. The Partners in Commendam shall have the right to vote on the following matters:

(i) Termination and dissolution of the Partnership;

(ii) Removal of the General Partner;

(iii) Admission of a new General Partner;

(iv) Amendment of this Contract;

(v) Sale of all or substantially all Partnership assets outside the ordinary course of business;

(vi) Merger, conversion, or consolidation of the Partnership;

(vii) Any matter specifically requiring the approval of Partners in Commendam under Louisiana law; and

(viii) Any other matter submitted to the Partners in Commendam for a vote by the General Partner.

(e) Right to Information. Each Partner in Commendam shall have the right to inspect the books and records of the Partnership during reasonable business hours and to receive copies of financial statements and tax returns, in accordance with Section 9.3.

Section 5.6 Meetings.

(a) Annual Meeting. The General Partner shall call an annual meeting of the Partners to be held at such time and place in the State of Louisiana as the General Partner shall designate. Written notice of each annual meeting shall be given to all Partners not less than [____] nor more than [____] days prior to the date of such meeting.

(b) Special Meetings. Special meetings of the Partners may be called by the General Partner or by Partners in Commendam holding in the aggregate not less than [____]% of the total Percentage Interests of all Partners in Commendam. Written notice of each special meeting shall state the purpose thereof and shall be given to all Partners not less than [____] nor more than [____] days prior to the date of such meeting.

(c) Quorum. The presence, in person or by proxy, of the General Partner and Partners in Commendam holding in the aggregate not less than [____]% of the total Percentage Interests of all Partners in Commendam shall constitute a quorum.

(d) Voting. Except as otherwise specifically provided in this Contract, all matters submitted to a vote of the Partners shall be decided by the affirmative vote of a Majority in Interest of the Partners voting on such matter. Each Partner shall be entitled to cast votes proportionate to such Partner's Percentage Interest.

(e) Action Without a Meeting. Any action required or permitted to be taken at a meeting of the Partners may be taken without a meeting if a written consent setting forth the action so taken is signed by Partners having not less than the minimum number of votes that would be necessary to authorize such action at a meeting at which all Partners were present and voted.

(f) Proxies. Any Partner may authorize another Person to act for such Partner by proxy (procuration) with respect to any vote, consent, or approval. Such proxy must be in writing, signed by the granting Partner, and delivered to the General Partner prior to any meeting or action.

Section 5.7 Officers. The General Partner may appoint officers of the Partnership, including a president, one or more vice presidents, a secretary, a treasurer, and such other officers as the General Partner deems appropriate. Such officers shall have such titles, duties, and authority as the General Partner shall determine. Officers shall serve at the pleasure of the General Partner.

Section 5.8 Partnership Expenses. The Partnership shall bear and pay all costs and expenses of its operations, including but not limited to: (a) organizational expenses; (b) operating expenses; (c) legal, accounting, and professional fees; (d) insurance premiums; (e) taxes and governmental fees, including any filing fees payable to the Secretary of State; (f) debt service; (g) notarial fees for authentic acts required under Louisiana law; and (h) expenses of winding up and liquidation.

ARTICLE VI: TRANSFER OF PARTNERSHIP INTERESTS

Section 6.1 General Restrictions on Transfer. Under Louisiana Civil Code Article 2807, the rights of a partner in a partnership may not be seized by the partner's creditors, but a creditor may obtain a charging order against the partner's interest. No Partner shall Transfer all or any portion of such Partner's Partnership Interest except in compliance with the provisions of this Article VI and applicable law. Any attempted Transfer in violation of this Article VI shall be null and of no effect.

Section 6.2 Consent Requirement. Under Louisiana Civil Code Article 2809, a partner may not transfer all or a part of the partner's interest in the partnership without the consent of all other partners. In accordance with this principle, no Transfer of a Partnership Interest shall be permitted unless each of the following conditions is satisfied:

(a) All Partners have given prior written consent to such Transfer (or, in lieu thereof, the General Partner and a Majority in Interest of the Partners in Commendam have consented, if this Contract is deemed to modify the unanimous consent requirement of the Civil Code);

(b) The transferee has executed and delivered to the General Partner a written agreement to be bound by all the terms and conditions of this Contract;

(c) The transferor and/or transferee shall have paid all costs and expenses (including reasonable attorneys' fees) incurred by the Partnership in connection with such Transfer;

(d) The Transfer will not result in the Partnership being treated as a "publicly traded partnership" within the meaning of Section 7704 of the Code;

(e) The Transfer will not cause a termination of the Partnership under Section 708 of the Code (or any successor provision);

(f) An opinion of counsel satisfactory to the General Partner has been rendered to the effect that such Transfer is exempt from registration under applicable federal and state securities laws, including the Louisiana Securities Law (La. R.S. 51:701 et seq.); and

(g) The Transfer complies with all applicable provisions of the Louisiana Civil Code and this Contract.

Section 6.3 Right of First Refusal.

(a) Before any Partner (the "Offering Partner") may Transfer all or any portion of such Partner's Partnership Interest to a third party (other than a Permitted Transfer under Section 6.4), the Offering Partner shall first offer such Partnership Interest to the other Partners (the "Non-Offering Partners") on the same terms and conditions as the proposed Transfer.

(b) The Offering Partner shall give written notice (the "Offer Notice") to the Partnership and to each Non-Offering Partner, setting forth: (i) the identity of the proposed transferee; (ii) the Partnership Interest proposed to be transferred; (iii) the purchase price and other material terms and conditions of the proposed Transfer; and (iv) a copy of any written offer or agreement from the proposed transferee.

(c) Each Non-Offering Partner shall have [____] days from receipt of the Offer Notice to elect to purchase all or a pro rata portion of the offered Partnership Interest on the same terms and conditions set forth in the Offer Notice, by giving written notice of such election to the Offering Partner.

(d) If the Non-Offering Partners do not collectively elect to purchase all of the offered Partnership Interest within such [____]-day period, the Offering Partner may Transfer the offered Partnership Interest to the proposed transferee identified in the Offer Notice on the same or more favorable terms and conditions as set forth therein, provided that such Transfer is consummated within [____] days after the expiration of the right of first refusal period and all conditions of Section 6.2 are satisfied.

Section 6.4 Permitted Transfers. Notwithstanding the restrictions in Sections 6.1 through 6.3, the following Transfers shall be deemed "Permitted Transfers" and shall not be subject to the right of first refusal in Section 6.3, provided that the conditions in Section 6.2(b) through (g) are satisfied:

(a) A Transfer by any Partner to such Partner's spouse, descendants, ascendants, or siblings, or to a trust (fideicommissary or otherwise) for the benefit of any such family members;

(b) A Transfer by any Partner to an entity wholly owned by such Partner or such Partner's family members described in subsection (a);

(c) A Transfer by a corporate or entity Partner to a successor entity in connection with a merger, reorganization, or consolidation; and

(d) A Transfer by a Partner to such Partner's succession (estate), executor, administrator, or legal representative upon the death of such Partner, subject to Section 6.5.

Section 6.5 Death of a Partner and Succession Rights. The parties acknowledge that under Louisiana Civil Code Article 2826, the death of a partner is a cause of termination of the partnership unless the contract provides otherwise. This Contract provides as follows:

(a) Death of a Partner in Commendam. Upon the death of a Partner in Commendam, the Partnership shall not terminate. The deceased Partner's successors (heirs, legatees, or assigns under Louisiana law of successions) shall be entitled to receive distributions attributable to the deceased Partner's Partnership Interest and, with the consent of the General Partner, may be admitted as substitute Partners in Commendam.

(b) Death of the General Partner. Upon the death of the sole General Partner (if an individual), the Partnership shall terminate unless the remaining Partners unanimously agree in writing within ninety (90) days of such death to continue the Partnership and to appoint one or more successor General Partners. If the General Partner is a juridical entity, its dissolution shall have the same effect as the death of an individual General Partner.

Section 6.6 Transfer of General Partner Interest. The General Partner may not Transfer all or any portion of its interest as General Partner without the prior written consent of all Partners in Commendam.

ARTICLE VII: WITHDRAWAL AND REMOVAL

Section 7.1 Withdrawal of General Partner.

(a) Under Louisiana Civil Code Article 2823, when a partnership has been established for a term, a partner may withdraw before the term expires, but only for just cause. If a partner withdraws without just cause, the partner is liable for resulting damages.

(b) If the Partnership has not been established for a term, any General Partner may withdraw upon not less than [____] days' prior written notice to all Partners in Commendam. Such withdrawal shall be deemed a renunciation in good faith and at a time not unfavorable to the partnership, as required by Louisiana Civil Code Article 2824.

(c) Upon the withdrawal of the sole General Partner, the remaining Partners may, within [____] days after such withdrawal, elect to continue the Partnership by appointing one or more successor General Partners.

Section 7.2 Removal of General Partner. The General Partner may be removed as General Partner upon the affirmative vote of Partners in Commendam holding not less than [____]% of the total Percentage Interests of all Partners in Commendam, but only for "Cause," which shall mean:

(a) A material breach of this Contract that remains uncured for [____] days after written notice thereof;

(b) Fraud, willful misconduct (dol), or gross negligence (faute lourde) in the management of the Partnership;

(c) A material violation of the obligations of good faith owed to the Partnership and the other Partners;

(d) The filing by or against the General Partner of a petition in bankruptcy or a proceeding under any federal or state insolvency law;

(e) A material violation of applicable law that adversely affects the Partnership;

(f) The conviction of the General Partner (or, if an entity, any principal thereof) of a felony; or

(g) The General Partner's interdiction (if an individual) or dissolution (if an entity).

Section 7.3 Withdrawal of Partner in Commendam.

(a) A Partner in Commendam may not withdraw from the Partnership prior to the termination and winding up of the Partnership unless:

(i) The withdrawal is permitted under the express terms of this Contract;

(ii) The General Partner consents to such withdrawal in writing; or

(iii) A court of competent jurisdiction orders such withdrawal.

(b) A Partner in Commendam who withdraws in accordance with this Section 7.3 shall be entitled to receive the fair market value of such Partner's Partnership Interest as of the date of withdrawal, to be determined by the General Partner, payable within a reasonable time and in the manner determined by the General Partner.

Section 7.4 Distribution Upon Withdrawal. Upon the withdrawal of any Partner in accordance with this Article VII, such Partner shall be entitled to receive, within a reasonable time, the amount to which such Partner would be entitled upon a liquidation of the Partnership based on the fair market value of Partnership assets as of the date of withdrawal, less any damages owed by such Partner to the Partnership. Payment may be made in installments over a period not to exceed [____] months at the discretion of the General Partner, with interest on the unpaid balance at the rate of [____]% per annum.

ARTICLE VIII: TERMINATION, DISSOLUTION, LIQUIDATION, AND WINDING UP

Section 8.1 Causes of Termination. The Partnership shall terminate upon the first to occur of the following events, in accordance with Louisiana Civil Code Article 2826:

(a) Expiration of Term. The expiration of the term for which the Partnership was established, if a term was specified in this Contract;

(b) Accomplishment of Purpose. The accomplishment of the object of the Partnership, or the occurrence of an event that makes the accomplishment of the object impossible;

(c) Consent of Partners. The written consent of all Partners;

(d) Death, Interdiction, or Dissolution of a General Partner. The death, interdiction, or dissolution of the sole or any General Partner, unless the Partnership is continued with the consent of the remaining Partners under the right to do so stated in this Contract, or unless, within ninety (90) days after such event, all remaining Partners agree in writing to continue the Partnership and to the appointment of one or more General Partners if necessary or desired, as provided in Louisiana Civil Code Article 2826;

(e) Bankruptcy. A decree of court dissolving the Partnership, or the filing by or against the Partnership or the sole General Partner of a petition in bankruptcy;

(f) Withdrawal of General Partner. The withdrawal of the sole General Partner, unless a successor is appointed as provided in Section 7.1;

(g) Renunciation by a Partner. The renunciation by any partner in a partnership that is not for a term, subject to the requirements of good faith and reasonable timing under Louisiana Civil Code Article 2824;

(h) Judicial Dissolution. An order of a Louisiana court dissolving the Partnership upon the application of a Partner for just cause, in accordance with Louisiana Civil Code Article 2826; or

(i) Mutual Consent. The mutual consent or agreement of the Partners to dissolve the Partnership.

Section 8.2 Continuation of Partnership. Notwithstanding the events described in Section 8.1(d), (f), and (g), the remaining Partners may elect to continue the Partnership as follows:

(a) If the General Partner dies, is interdicted, withdraws, or is dissolved, the remaining Partners may, within ninety (90) days of such event, unanimously agree in writing to continue the Partnership and appoint one or more successor General Partners;

(b) If a Partner in Commendam withdraws or dies, the Partnership shall continue unless otherwise provided in this Contract;

(c) Any continuation of the Partnership shall require an amendment to this Contract and an amended filing with the Secretary of State.

Section 8.3 Dissolution, Liquidation, and Division of Assets. Upon termination of the Partnership, the following procedures shall apply, in accordance with Louisiana Civil Code Articles 2832 through 2835:

(a) Appointment of Liquidator. The General Partner (or, if no General Partner remains, a Person designated by a majority in interest of the remaining Partners, or, if the Partners cannot agree, a Person appointed by a court of competent jurisdiction) shall serve as the liquidator of the Partnership (the "Liquidator").

(b) Powers of Liquidator. The Liquidator shall have the authority to:

(i) Complete all unfinished business of the Partnership;

(ii) Collect all debts owed to the Partnership;

(iii) Sell and convert into cash all Partnership property, or distribute Partnership property in kind in accordance with the Partners' agreement;

(iv) Pay and discharge all debts and obligations of the Partnership;

(v) Prepare a final accounting of the Partnership's assets, liabilities, and the interests of each Partner; and

(vi) Distribute any remaining assets to the Partners in accordance with Section 8.4.

(c) Winding Up Period. The Liquidator shall use reasonable efforts to liquidate the Partnership's assets and wind up its affairs in an orderly manner within a reasonable period of time.

Section 8.4 Distribution Upon Liquidation. Upon the liquidation of the Partnership, the assets of the Partnership (or the proceeds thereof) shall be applied and distributed in the following order of priority:

(a) First, to the payment and discharge of all debts and obligations of the Partnership owed to third-party creditors, in the order of priority provided by law;

(b) Second, to the payment of debts and obligations owed by the Partnership to Partners who are creditors of the Partnership (other than for capital contributions or distributions), including loans by Partners under Section 3.7;

(c) Third, to the establishment of any reserves that the Liquidator deems reasonably necessary for any contingent or unforeseen liabilities or obligations of the Partnership, which reserves shall be held in escrow for such period as the Liquidator deems advisable;

(d) Fourth, to the Partners in accordance with and to the extent of the positive balances in their respective Capital Accounts, after giving effect to all allocations of Net Profits and Net Losses for the period through the date of final distribution; and

(e) Fifth, to the Partners in accordance with their respective Percentage Interests.

The parties acknowledge that Louisiana Civil Code Article 2817 provides that upon termination of a partnership, each partner is entitled to the return of the things the partner contributed, unless otherwise agreed. The Partners hereby agree that distributions upon liquidation shall be in cash or, if applicable, in kind at the values determined by the Liquidator, and that the specific order of distribution set forth above shall control.

Section 8.5 Cancellation of Filing. Upon completion of the dissolution, liquidation, and distribution of the Partnership's assets, the General Partner (or the Liquidator) shall file a notice of cancellation or termination with the Secretary of State to remove the Partnership from the Central Registry.

Section 8.6 No Obligation to Restore Deficit. Except as required by law or as otherwise provided herein:

(a) No Partner in Commendam shall be obligated to restore a deficit balance in such Partner's Capital Account.

(b) The General Partner shall be obligated to restore any deficit balance in the General Partner's Capital Account within [____] days following the date of liquidation of the Partnership, or such later date as may be required by the Treasury Regulations.

ARTICLE IX: BOOKS, RECORDS, AND ACCOUNTING

Section 9.1 Fiscal Year. The Fiscal Year of the Partnership shall be:

☐ The calendar year (January 1 through December 31)

☐ A fiscal year ending on [________________________________]

Section 9.2 Books and Records. The General Partner shall maintain full and accurate books and records of the Partnership at the Partnership's principal place of business, including:

(a) A current list of the full name, municipal address, and taxpayer identification number of each Partner;

(b) A copy of this Contract and all amendments thereto, as filed with the Secretary of State;

(c) Copies of the Partnership's federal, state, and local income tax returns and reports for the three (3) most recent Fiscal Years;

(d) Copies of the Partnership's financial statements for the three (3) most recent Fiscal Years;

(e) An accounting of each Partner's Capital Contributions, Capital Account balance, and share of Profits, Losses, and distributions;

(f) Records of all authentic acts executed on behalf of the Partnership; and

(g) Such other records as may be required by law.

Section 9.3 Inspection Rights. Each Partner and each Partner's authorized representative shall have the right to inspect and copy, at such Partner's expense, during ordinary business hours, any of the Partnership's books and records described in Section 9.2. The General Partner shall respond to reasonable requests for information within a reasonable time.

Section 9.4 Accounting Method. The books and records of the Partnership shall be maintained on the:

☐ Cash basis of accounting

☐ Accrual basis of accounting

☐ Other: [________________________________]

in accordance with generally accepted accounting principles ("GAAP") consistently applied, or such other method as the General Partner shall determine in consultation with the Partnership's accountants.

Section 9.5 Financial Reports. The General Partner shall cause to be delivered to each Partner:

(a) Within [____] days after the end of each Fiscal Year, an annual financial report containing a balance sheet, income statement, statement of cash flows, and statement of changes in Partners' capital;

(b) Within [____] days after the end of each calendar quarter, a quarterly financial summary; and

(c) Such other financial reports and information as any Partner may reasonably request from time to time.

Section 9.6 Tax Returns and Reports.

(a) The General Partner shall cause the Partnership's federal, state, and local income tax returns to be prepared and timely filed for each Fiscal Year, including the Louisiana Partnership Return of Income (Form IT-565). The General Partner shall provide each Partner with a completed federal Schedule K-1 (IRS Form 1065) and a Louisiana Schedule K-1 on or before [________________________________] (e.g., the statutory deadline, currently March 15 or as extended).

(b) The General Partner is hereby designated as the "Tax Matters Partner" (for taxable years to which Section 6231(a)(7) of the Code applies) and as the "Partnership Representative" (for taxable years subject to the centralized partnership audit procedures of Sections 6221-6241 of the Code). The Partnership Representative shall have the authority to take all actions on behalf of the Partnership with respect to any federal or state tax audit or proceeding.

(c) The General Partner shall make or revoke, on behalf of the Partnership, any tax elections permitted by the Code, the Treasury Regulations, or applicable Louisiana state tax law.

Section 9.7 Bank Accounts. All funds of the Partnership shall be deposited in one or more accounts at such banks, trust companies, or other depositories as the General Partner shall determine. Withdrawals from such accounts shall be made upon such signature or signatures as the General Partner shall designate.

ARTICLE X: INDEMNIFICATION AND LIABILITY

Section 10.1 Indemnification.

(a) The Partnership shall indemnify, defend, and hold harmless the General Partner and the General Partner's officers, directors, members, managers, partners, shareholders, employees, agents, and Affiliates (collectively, "Indemnified Persons") from and against any and all claims, demands, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees and court costs) arising out of or related to the management of the Partnership or the conduct of the Partnership's business, to the fullest extent permitted by law; provided, however, that no Indemnified Person shall be indemnified for:

(i) Acts or omissions constituting fraud (dol), intentional misconduct, or willful violation of law;

(ii) Any transaction in which such Indemnified Person received a personal benefit in violation or breach of the provisions of this Contract;

(iii) Gross negligence (faute lourde) in the management of the Partnership; or

(iv) Any act or omission in bad faith or in violation of the obligation of good faith owed to the Partnership and the Partners.

(b) Any indemnification under this Section 10.1 shall be paid from the assets of the Partnership only, and no Partner shall have any personal liability for such indemnification.

(c) Expenses incurred by an Indemnified Person in defending any proceeding shall be advanced by the Partnership prior to the final disposition of such proceeding upon receipt of an undertaking by the Indemnified Person to repay such amounts if it shall ultimately be determined that such Person is not entitled to be indemnified under this Section 10.1.

Section 10.2 Limitation of Liability.

(a) General Partner. Except for fraud (dol), willful misconduct, gross negligence (faute lourde), or bad faith, the General Partner shall not be liable to the Partnership or to any Partner for any act or omission taken in good faith and in a manner the General Partner reasonably believed to be in or not opposed to the best interests of the Partnership.

(b) Partners in Commendam. Pursuant to Louisiana Civil Code Article 2840, a Partner in Commendam is liable for the obligations of the Partnership only to the extent of the Partner's agreed contribution. However, a Partner in Commendam who participates in the management of the Partnership or who permits the partner's name to be used in business dealings in a manner implying the partner is a general partner may become liable as a general partner, as provided in Louisiana Civil Code Articles 2839 and 2840.

(c) Solidary Liability of General Partners. Under Louisiana law, general partners are solidarily liable (jointly and severally liable in common law terms) for all debts and obligations of the partnership. Each General Partner acknowledges and accepts this solidary liability.

Section 10.3 Insurance. The General Partner may cause the Partnership to purchase and maintain insurance on behalf of the Partnership, the General Partner, and any officer, employee, or agent of the Partnership against any liability asserted against such Person and incurred by such Person in any such capacity, or arising out of such Person's status as such.

ARTICLE XI: MISCELLANEOUS

Section 11.1 Amendments. This Contract may be amended or modified only by a written instrument executed by the General Partner and a Majority in Interest of the Partners in Commendam; provided, however, that no amendment shall:

(a) Increase any Partner's Capital Contribution obligation without the written consent of such Partner;

(b) Reduce any Partner's Percentage Interest or right to distributions without the written consent of such Partner;

(c) Alter the distribution priorities set forth in Sections 4.5 or 8.4 without the written consent of each Partner adversely affected thereby;

(d) Convert a Partner in Commendam's interest to a General Partner's interest without the written consent of such Partner; or

(e) Amend this Section 11.1 without the unanimous written consent of all Partners.

Any amendment to this Contract that affects the information required to be filed with the Secretary of State shall be reflected in an amended filing with the Secretary of State in accordance with La. R.S. 9:3402 et seq.

Section 11.2 Notices. All notices, requests, demands, and other communications required or permitted under this Contract shall be in writing and shall be deemed duly given when:

(a) Delivered personally;

(b) Sent by certified or registered mail, return receipt requested, postage prepaid;

(c) Sent by overnight courier service; or

(d) Transmitted by electronic mail, with confirmation of receipt;

addressed to each Partner at the municipal address set forth on Schedule A or at such other address as such Partner may designate by written notice to the other Partners. Notices shall be deemed received: (i) upon delivery, if delivered personally; (ii) three (3) Business Days after mailing, if sent by certified or registered mail; (iii) one (1) Business Day after deposit, if sent by overnight courier; or (iv) upon transmission, if sent by electronic mail with confirmation of receipt.

Section 11.3 Governing Law. This Contract shall be governed by and construed in accordance with the laws of the State of Louisiana, including the Louisiana Civil Code and the Louisiana Revised Statutes, without giving effect to the principles of conflicts of laws thereof. The parties acknowledge that Louisiana is a civil law jurisdiction, and this Contract shall be interpreted in accordance with the civilian tradition of interpretation, including the rules set forth in Louisiana Civil Code Articles 2045 through 2057 (Interpretation of Contracts).

Section 11.4 Jurisdiction and Venue. Any action, suit, or proceeding arising out of or related to this Contract shall be brought exclusively in the courts of the State of Louisiana, [________________________________] Parish, or the United States District Court for the [________________________________] District of Louisiana. Each Partner hereby consents to the personal jurisdiction of such courts and waives any objection to venue therein.

Section 11.5 Dispute Resolution.

(a) Mediation. Prior to commencing any litigation or arbitration, the parties shall attempt to resolve any dispute arising under this Contract through good faith mediation. Either party may initiate mediation by delivering written notice to the other party or parties. Mediation shall be conducted in [________________________________] Parish, Louisiana, before a mediator mutually agreed upon by the parties, or, failing agreement, appointed by the American Arbitration Association.

(b) Arbitration (if elected).

☐ The parties agree to submit any dispute not resolved through mediation to binding arbitration in accordance with the rules of the American Arbitration Association. Arbitration shall be conducted in [________________________________] Parish, Louisiana. The arbitrator's decision shall be final, binding, and enforceable in any court of competent jurisdiction. The parties acknowledge that Louisiana Code of Civil Procedure Article 3099 et seq. governs arbitration proceedings in Louisiana.

☐ The parties do not elect arbitration. Any dispute not resolved through mediation shall be resolved by litigation in courts of competent jurisdiction.

Section 11.6 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTNER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CONTRACT OR THE TRANSACTIONS CONTEMPLATED HEREBY. The parties acknowledge that jury trials are available in Louisiana but choose to waive this right.

Section 11.7 Severability (Nullity of Provisions). If any provision of this Contract or the application thereof to any Person or circumstance is held null, invalid, or unenforceable by any court of competent jurisdiction, the remainder of this Contract and the application of such provision to other Persons or circumstances shall not be affected thereby. The parties agree that, to the extent permitted by law, the court shall reform any null provision to give it the maximum effect permitted by law.

Section 11.8 Entire Agreement. This Contract (including all Schedules and Exhibits attached hereto) constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written, with respect to such subject matter. Under Louisiana law, this merger clause shall be interpreted in accordance with Louisiana Civil Code Article 1848 regarding the parol evidence rule.

Section 11.9 Counterparts. This Contract may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures delivered by electronic transmission (including PDF) shall be valid and binding.

Section 11.10 Waiver (Renunciation of Rights). No failure or delay by any party in exercising any right, power, or privilege under this Contract shall operate as a waiver (renunciation) thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. Under Louisiana Civil Code Article 3506, a waiver of rights must be clear and unequivocal.

Section 11.11 Binding Effect. This Contract shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, legatees, executors, administrators, and permitted assigns.

Section 11.12 Construction and Interpretation. The headings in this Contract are for convenience of reference only and shall not limit or otherwise affect the interpretation of any provision. Unless the context otherwise requires, the singular includes the plural and vice versa, and words of any gender include all genders. This Contract shall be interpreted in accordance with Louisiana Civil Code Articles 2045 through 2057, which provide that the interpretation of a contract is the determination of the common intent of the parties, and that the words of a contract must be given their generally prevailing meaning.

Section 11.13 Confidentiality. Each Partner agrees to keep confidential and not to disclose to any third party any proprietary or confidential information concerning the Partnership's business, operations, or financial affairs, except: (a) as required by law or legal process; (b) to such Partner's legal, financial, and tax advisors, who shall be bound by similar confidentiality obligations; (c) in connection with a permitted Transfer of a Partnership Interest; or (d) as consented to in writing by the General Partner.

Section 11.14 Power of Attorney (Procuration). Each Partner in Commendam hereby irrevocably constitutes and appoints the General Partner as such Partner's true and lawful mandatary (attorney-in-fact), with full power and authority in such Partner's name, place, and stead, to execute, acknowledge, file, and record the following documents:

(a) This Contract and any amendments hereto;

(b) Any filing or registration with the Secretary of State required by law;

(c) Any certificate or document required to qualify or continue the Partnership as a partnership in commendam in Louisiana or any other jurisdiction;

(d) Any document required to dissolve, terminate, or cancel the Partnership; and

(e) Any other instrument that may be required to be filed or recorded by the Partnership or the Partners under applicable law.

This mandate (power of attorney) is coupled with an interest and shall survive the death, disability, interdiction, or dissolution of any Partner in Commendam and shall survive the Transfer of all or any portion of a Partner's Partnership Interest. The parties acknowledge that this grant constitutes an irrevocable mandate under Louisiana Civil Code Article 3024.

Section 11.15 Authentic Acts. The parties acknowledge that certain transactions under Louisiana law require execution by authentic act (before a notary public and two witnesses), including but not limited to transfers of immovable property (La. C.C. Art. 1839) and certain donations. The General Partner shall ensure that all such transactions are properly executed in compliance with Louisiana law.

SIGNATURE PAGE

IN WITNESS WHEREOF (EN FOI DE QUOI), the parties hereto have executed this Contract of Partnership in Commendam as of the date first set forth above.

GENERAL PARTNER(S) (ASSOCIE(S) GERANT(S)):

[________________________________]

By: [________________________________]

Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

Municipal Address: [________________________________]

[________________________________] (Additional General Partner, if applicable)

By: [________________________________]

Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

Municipal Address: [________________________________]

PARTNER(S) IN COMMENDAM (LIMITED PARTNER(S)):

[________________________________]

Signature: [________________________________]

Name: [________________________________]

Date: [__/__/____]

Municipal Address: [________________________________]

[________________________________]

Signature: [________________________________]

Name: [________________________________]

Date: [__/__/____]

Municipal Address: [________________________________]

[________________________________]

Signature: [________________________________]

Name: [________________________________]

Date: [__/__/____]

Municipal Address: [________________________________]

(Attach additional signature pages as needed for additional Partners in Commendam.)

SCHEDULE A: PARTNERS AND CAPITAL CONTRIBUTIONS

Description of Non-Monetary Contributions:

SCHEDULE B: INITIAL ALLOCATIONS AND DISTRIBUTION PERCENTAGES

Note: Pursuant to Louisiana Civil Code Article 2814, a contract of partnership in which all the profits are allotted to one partner, or in which one partner is excluded from all share in the losses, is absolutely null (a "leonine partnership"). The allocations above must comply with this prohibition.

SCHEDULE C: DESCRIPTION OF PARTNERSHIP BUSINESS

Business Purpose: [________________________________]

Description of Activities: [________________________________]

Target Markets/Industries: [________________________________]

Geographic Scope: [________________________________]

LOUISIANA-SPECIFIC COMPLIANCE NOTES

1. Civil Law Jurisdiction

Louisiana is the only U.S. state that operates under a civil law system derived from the French and Spanish legal traditions, as codified in the Louisiana Civil Code. Partnership law in Louisiana is governed primarily by the Louisiana Civil Code, Title XI, "Of Partnership" (Articles 2801-2840), and not by the Revised Uniform Limited Partnership Act adopted by most common law states. Practitioners familiar with common law limited partnership concepts should be aware of significant differences in terminology, structure, and legal principles.

2. Partnership in Commendam vs. Limited Partnership

In Louisiana's civil law terminology, a "partnership in commendam" is the equivalent of a "limited partnership" in common law jurisdictions. The term "partner in commendam" corresponds to "limited partner," and the general partner is sometimes referred to as the "associe gerant" (managing partner). This Contract uses both Louisiana civil law terminology and common law terminology for clarity.

3. Filing Requirements

Under Louisiana Civil Code Article 2836 and La. R.S. 9:3401 et seq., the contract of partnership in commendam must be in writing and filed for registry with the Secretary of State. This is a critical requirement because until the contract is filed, partners in commendam are liable to third persons in the same manner as general partners.

Filing Address:
Louisiana Secretary of State
Commercial Division
P.O. Box 94125
Baton Rouge, Louisiana 70804-9125

Physical Address:
8585 Archives Avenue
Baton Rouge, Louisiana 70809

Online Filing: https://www.sos.la.gov

Required Form: Louisiana Partnership Registration Form (Form 342)

Required Content (La. R.S. 9:3403): The contract filed for registry must contain the name and taxpayer identification number of the partnership, the municipal address of its principal place of business in Louisiana, and the name and municipal address of each partner, including partners in commendam.

4. Name Requirements

Under Louisiana Civil Code Article 2838, for the limited liability of a partner in commendam to be effective as to third persons:

(a) The partnership must have a name that appears in the contract of partnership;
(b) The name must include language that clearly identifies it as a partnership in commendam, such as "limited partnership" or "partnership in commendam"; and
(c) The name must not imply that a partner in commendam is a general partner.

5. Use of Partner in Commendam's Name

Under Louisiana Civil Code Article 2839, a partner in commendam becomes liable as a general partner if the partner permits the partner's name to be used in business dealings of the partnership in a manner that implies the partner is a general partner. This is a critical distinction that must be carefully observed.

6. Limitation of Liability for Partners in Commendam

Under Louisiana Civil Code Article 2840, a partner in commendam is liable for the obligations of the partnership only to the extent of the partner's agreed contribution. The contribution may consist of money, things, or the performance of nonmanagerial services. The partnership agreement must describe the contribution and state either its agreed value or a method of determining it. This limited liability is contingent upon: (a) proper filing of the contract with the Secretary of State; (b) not participating in the management of the partnership; and (c) not permitting the partner's name to be used in a manner implying general partner status.

7. Prohibition on Leonine Partnerships

Louisiana Civil Code Article 2814 prohibits "leonine" partnerships - that is, a partnership in which all profits are allotted to one partner, or in which one partner is excluded from all share in losses. Such a contract is absolutely null. All profit and loss sharing arrangements in this Contract must comply with this prohibition.

8. Juridical Personality

Under Louisiana Civil Code Article 2801, a partnership is a juridical person, distinct from its partners. This means the partnership can own property, enter into contracts, and sue or be sued in its own name. This is significant because in many common law jurisdictions, limited partnerships may not have separate juridical personality.

9. Termination and Dissolution

Louisiana partnership termination and dissolution provisions (Louisiana Civil Code Articles 2826-2835) differ from the dissolution provisions in common law states. Key distinctions include:

(a) A partnership terminates (rather than "dissolves" as in common law) upon the occurrence of the causes specified in the Civil Code;
(b) The death, interdiction, or dissolution of any general partner is a cause of termination unless the contract provides for continuation;
(c) Winding up (liquidation and division of assets) follows termination; and
(d) Each partner is entitled to the return of the things the partner contributed (La. C.C. Art. 2817).

10. Authentic Acts

Certain transactions in Louisiana must be executed by authentic act (before a notary public and two witnesses), including transfers of immovable property (La. C.C. Art. 1839) and certain partnership transactions involving immovable property. The General Partner should ensure compliance with all notarial requirements.

11. Louisiana Income Tax

Louisiana imposes an individual income tax on residents and on nonresidents earning income from Louisiana sources. Partnership income flows through to the individual partners, who report their distributive shares on their Louisiana individual income tax returns. The Partnership must file an annual Louisiana Partnership Return of Income (Form IT-565). Louisiana's individual income tax rates currently range from 1.85% to 4.25%.

12. Louisiana Franchise Tax

Partnerships that are required to file a federal partnership return and that have a filing requirement in Louisiana may be subject to the Louisiana corporation franchise tax if they have elected to be taxed as corporations. Standard limited partnerships (partnerships in commendam) that are treated as partnerships for federal tax purposes are generally not subject to the Louisiana franchise tax, but should consult with tax advisors regarding any potential exposure.

13. Louisiana Secretary of State Annual Report

Unlike some states, Louisiana does not currently require annual reports for limited partnerships (partnerships in commendam). However, the Partnership should verify current filing requirements with the Secretary of State's office, as requirements may change.

14. Good Faith Obligation

Louisiana Civil Code Article 1759 provides that good faith shall govern the conduct of the obligor and the obligee in whatever pertains to the obligation. This is a fundamental principle of Louisiana contract law that applies to all aspects of the partnership relationship, and is broader in scope than the implied covenant of good faith and fair dealing recognized in common law jurisdictions.

SOURCES AND REFERENCES

• Louisiana Civil Code, Title XI, "Of Partnership" (Articles 2801-2840): https://legis.la.gov/legis/Law.aspx?d=109907
• Louisiana Civil Code Article 2836 (Provisions Applicable to Partnerships in Commendam): https://law.justia.com/codes/louisiana/civil-code/article-2836/
• Louisiana Civil Code Article 2837 (Partnership in Commendam; Definition): https://law.justia.com/codes/louisiana/civil-code/article-2837/
• Louisiana Civil Code Article 2838 (Name; Designation): https://law.justia.com/codes/louisiana/2011/cc/cc2838/
• Louisiana Civil Code Article 2839 (Name of Partner in Commendam; Use): https://law.justia.com/codes/louisiana/civil-code/article-2839/
• Louisiana Civil Code Article 2840 (Partner in Commendam; Liability; Agreed Contribution): https://law.justia.com/codes/louisiana/civil-code/article-2840/
• Louisiana Civil Code Article 2826 (Termination of Partnership; Causes): https://law.justia.com/codes/louisiana/civil-code/article-2826/
• Louisiana Civil Code Article 2814 (Prohibition of Leonine Partnership): https://lcco.law.lsu.edu/?uid=112&ver=en
• La. R.S. 9:3401 (Central Registry; Creation): https://law.justia.com/codes/louisiana/2015/code-revisedstatutes/title-9/rs-9-3401
• La. R.S. 9:3402 (Filing): https://law.justia.com/codes/louisiana/2011/rs/title9/rs9-3402/
• La. R.S. 9:3403 (Contract of Partnership; Required Content): https://law.justia.com/codes/louisiana/2021/revised-statutes/title-9/rs-3403/
• Louisiana Secretary of State, Commercial Division: https://www.sos.la.gov
• Louisiana Partnership Registration Form (Form 342): https://www.sos.la.gov/BusinessServices/PublishedDocuments/342PartnershipRegistrationLouisiana.pdf
• Louisiana Partnership Filing Instructions: https://www.sos.la.gov/BusinessServices/HTMLPages/LouisianaPartnershipFilingInstructions.htm
• LSU Law Center, Louisiana Civil Code Online: https://lcco.law.lsu.edu
• "The Partnership in Commendam: Tax Consequences" (LSU Law Digital Commons): https://digitalcommons.law.lsu.edu/cgi/viewcontent.cgi?article=4144&context=lalrev
• Internal Revenue Code, Subchapter K (Partnership Taxation): 26 U.S.C. §§ 701-777
• Treasury Regulations under Section 704(b): 26 C.F.R. § 1.704-1(b)

This template is provided for informational purposes only and does not constitute legal advice. Louisiana is a civil law jurisdiction with partnership provisions derived from the Louisiana Civil Code, which differs substantially from the common law partnership statutes of other states. This document must be reviewed and customized by a qualified attorney licensed in Louisiana before use. Do not execute this agreement without professional legal counsel.