Limited Partnership Agreement (Minnesota)

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LIMITED PARTNERSHIP AGREEMENT

STATE OF MINNESOTA

Formed Pursuant to the Minnesota Uniform Limited Partnership Act (Minn. Stat. Chapter 321)

This Limited Partnership Agreement ("Agreement") is entered into as of [__/__/____] ("Effective Date"), by and among the undersigned General Partner(s) and Limited Partner(s) (collectively, the "Partners").

ARTICLE I: FORMATION AND NAME

Section 1.1 Formation

The Partners hereby form a limited partnership (the "Partnership") pursuant to the Minnesota Uniform Limited Partnership Act, Minn. Stat. Chapter 321 (the "Act"). The rights and liabilities of the Partners shall be governed by this Agreement and, to the extent not inconsistent herewith, by the Act.

Section 1.2 Partnership Name

The name of the Partnership shall be:

[________________________________] Limited Partnership

[________________________________], L.P.

The Partnership name complies with Minn. Stat. § 321.0108, which requires the name to contain the words "limited partnership" or the abbreviation "L.P." or "LP."

Section 1.3 Registered Office and Agent

Registered Office Address (Minnesota):
[________________________________]
[________________________________]
[________________________________]

Registered Agent for Service of Process:
Name: [________________________________]
Street Address: [________________________________]
City: [________________________________] State: MN ZIP: [____]

The registered agent must have a street address in Minnesota and be available during normal business hours to accept service of process.

Section 1.4 Principal Place of Business

[________________________________]
[________________________________]
[________________________________]

Section 1.5 Term

The Partnership shall commence upon the filing of the Certificate of Limited Partnership with the Minnesota Secretary of State and shall continue until dissolved in accordance with Article XII of this Agreement or as otherwise provided by law.

☐ The Partnership shall have a specified termination date of: [__/__/____]
☐ The Partnership shall continue in perpetuity until dissolved pursuant to this Agreement

ARTICLE II: PURPOSE AND BUSINESS

Section 2.1 Purpose

The Partnership is formed for the following purposes:

[________________________________]
[________________________________]
[________________________________]
[________________________________]

Section 2.2 Powers

The Partnership shall have all powers necessary, convenient, or incidental to accomplish its purposes, including but not limited to the power to:

(a) Acquire, own, hold, improve, manage, and dispose of real and personal property;

(b) Enter into contracts, agreements, and other instruments;

(d) Lend money and extend credit;

(e) Sue and be sued in the Partnership name;

(f) Employ agents, employees, and independent contractors;

(g) Open and maintain bank accounts;

(h) Make investments;

(i) Conduct business in any state or jurisdiction where qualified to do so; and

(j) Engage in any lawful act or activity for which limited partnerships may be organized under the Act.

ARTICLE III: PARTNERS

Section 3.1 General Partner(s)

The following individual(s) or entity(ies) are hereby admitted as General Partner(s):

General Partner 1:
Name: [________________________________]
Address: [________________________________]
[________________________________]
Taxpayer ID/SSN (last 4 digits): XXX-XX-[____]
Initial Capital Contribution: $[________________________________]
Ownership Percentage: [____]%

General Partner 2 (if applicable):
Name: [________________________________]
Address: [________________________________]
[________________________________]
Taxpayer ID/SSN (last 4 digits): XXX-XX-[____]
Initial Capital Contribution: $[________________________________]
Ownership Percentage: [____]%

Section 3.2 Limited Partner(s)

The following individual(s) or entity(ies) are hereby admitted as Limited Partner(s):

Limited Partner 1:
Name: [________________________________]
Address: [________________________________]
[________________________________]
Taxpayer ID/SSN (last 4 digits): XXX-XX-[____]
Initial Capital Contribution: $[________________________________]
Ownership Percentage: [____]%

Limited Partner 2 (if applicable):
Name: [________________________________]
Address: [________________________________]
[________________________________]
Taxpayer ID/SSN (last 4 digits): XXX-XX-[____]
Initial Capital Contribution: $[________________________________]
Ownership Percentage: [____]%

Limited Partner 3 (if applicable):
Name: [________________________________]
Address: [________________________________]
[________________________________]
Taxpayer ID/SSN (last 4 digits): XXX-XX-[____]
Initial Capital Contribution: $[________________________________]
Ownership Percentage: [____]%

(Attach Schedule A for additional Limited Partners)

Section 3.3 Schedule of Partners

A complete schedule of all Partners, their capital contributions, and ownership percentages is attached hereto as Schedule A and incorporated by reference.

ARTICLE IV: GENERAL PARTNER POWERS AND DUTIES

Section 4.1 Management Authority

Pursuant to Minn. Stat. § 321.0402, the General Partner(s) shall have full, exclusive, and complete authority, power, and discretion to manage and control the business and affairs of the Partnership, to make all decisions regarding the Partnership, and to take any and all actions necessary, appropriate, or advisable to accomplish the purposes of the Partnership.

Section 4.2 Specific Powers

Without limiting the generality of Section 4.1, the General Partner(s) shall have the power and authority to:

(a) Execute, deliver, and perform contracts, agreements, and other instruments on behalf of the Partnership;

(b) Open, maintain, and close bank accounts and designate signatories thereon;

(d) Acquire, hold, manage, lease, and dispose of Partnership property;

(e) Employ and terminate employees, agents, attorneys, accountants, and other professionals;

(f) Commence, prosecute, defend, or settle litigation on behalf of the Partnership;

(g) Make all tax elections and file all tax returns on behalf of the Partnership;

(h) Admit new Partners in accordance with Article IX;

(i) Make distributions to Partners in accordance with Article VII;

(j) Call and conduct meetings of the Partners;

(k) Maintain Partnership books, records, and accounts; and

(l) Take any other action necessary or appropriate to carry out the purposes of the Partnership.

Section 4.3 Actions Requiring Partner Consent

Notwithstanding Section 4.1, the following actions shall require the consent of:

Majority of General Partners (if more than one):

(a) Ordinary business decisions in the day-to-day operations of the Partnership;

(b) Execution of contracts valued at less than $[________________________________];

All General Partners and Limited Partners holding a majority of Partnership Interests:

(a) Amendment of this Agreement (except as otherwise provided herein);

(b) Conversion to a Limited Liability Limited Partnership (LLLP);

(d) Sale, exchange, or disposition of all or substantially all Partnership assets outside the ordinary course of business;

(e) Admission of a new General Partner;

(f) Dissolution of the Partnership (other than by operation of law);

(g) Incurrence of indebtedness exceeding $[________________________________];

(h) Any transaction between the Partnership and a General Partner or Affiliate thereof.

Section 4.4 Standard of Care

Each General Partner shall discharge their duties in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the General Partner reasonably believes to be in the best interests of the Partnership.

Section 4.5 Reliance on Professionals

A General Partner may rely in good faith on information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by:

(a) One or more officers or employees of the Partnership reasonably believed to be reliable and competent;

(b) Legal counsel, public accountants, or other persons as to matters the General Partner reasonably believes to be within the person's professional competence; or

(c) A committee of Partners of which the General Partner is not a member if the General Partner reasonably believes the committee merits confidence.

Section 4.6 Devotion of Time

Unless otherwise agreed, the General Partner(s):

☐ Shall devote full time and attention to Partnership business
☐ Are not required to devote full time to Partnership business and may engage in other business activities

Section 4.7 Compensation of General Partner

Management Fee: The General Partner(s) shall be entitled to receive a management fee of $[________________________________] per [____] (month/quarter/year) for services rendered to the Partnership.

Reimbursement: The General Partner(s) shall be entitled to reimbursement for all reasonable out-of-pocket expenses incurred in connection with Partnership business.

Additional Compensation: The General Partner(s) may receive such additional compensation for services rendered as may be approved by Limited Partners holding a majority of Limited Partner interests.

ARTICLE V: LIMITED PARTNER RIGHTS AND RESTRICTIONS

Section 5.1 Limited Liability

Pursuant to Minn. Stat. § 321.0303, a Limited Partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for an obligation of the Partnership solely by reason of being a Limited Partner, even if the Limited Partner participates in the management and control of the Partnership.

Section 5.2 No Management Authority

Pursuant to Minn. Stat. § 321.0302, a Limited Partner does not have the right or power, as a Limited Partner, to act for or bind the Partnership. Limited Partners shall have no authority to:

(a) Execute documents or contracts on behalf of the Partnership;

(b) Bind the Partnership to any obligation;

(d) Make management decisions on behalf of the Partnership.

Section 5.3 Information Rights

Pursuant to Minn. Stat. § 321.0304, each Limited Partner has the right, upon reasonable written demand stating the purpose, to obtain from the Partnership:

(a) True and full information regarding the status of the Partnership business and financial condition;

(b) Promptly after becoming available, a copy of the Partnership's federal, state, and local income tax returns for each year;

(d) A copy of this Agreement and the Certificate of Limited Partnership and all amendments thereto;

(e) Information regarding the amount of cash and a description and statement of the agreed value of any other property or services contributed by each Partner;

(f) Information regarding the times at which or events upon which additional contributions are to be made;

(g) Information concerning the right of a Partner to receive distributions; and

(h) Such other information as is just and reasonable.

Notice Requirement: A Limited Partner must provide at least ten (10) days' written notice to the Partnership before inspecting Partnership records.

Section 5.4 Voting Rights

Limited Partners shall have the right to vote on the following matters:

(a) Amendment of this Agreement;

(b) Dissolution of the Partnership;

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

(e) Admission of a new General Partner;

(f) Removal of a General Partner for cause;

(g) Conversion to a Limited Liability Limited Partnership (LLLP); and

(h) Such other matters as may be required by law or this Agreement.

Section 5.5 Meetings of Limited Partners

Annual Meeting: An annual meeting of Limited Partners shall be held on [________________________________] of each year at a time and place designated by the General Partner(s), or at such other date as the General Partner(s) may determine.

Special Meetings: Special meetings may be called by:

The General Partner(s); or
Limited Partners holding at least [____]% of the Limited Partner interests.

Notice: Written notice of meetings shall be given at least [____] days prior to the meeting.

Quorum: A quorum shall consist of Limited Partners holding at least [____]% of the Limited Partner interests.

Voting: Except as otherwise provided, each Limited Partner shall be entitled to one vote for each percentage point of Partnership interest held.

Action Without Meeting: Any action that may be taken at a meeting of Limited Partners may be taken without a meeting if a written consent setting forth the action is signed by Limited Partners holding the requisite percentage of interests.

Section 5.6 Limited Partner Duties

Pursuant to Minn. Stat. § 321.0305:

(a) A Limited Partner does not have any fiduciary duty to the Partnership or to any other Partner solely by reason of being a Limited Partner;

(b) A Limited Partner shall discharge any duties to the Partnership and the other Partners and exercise any rights under this Agreement consistently with the contractual obligation of good faith and fair dealing; and

(c) A Limited Partner does not violate a duty or obligation merely because the Limited Partner's conduct furthers the Limited Partner's own interest.

ARTICLE VI: CAPITAL CONTRIBUTIONS

Section 6.1 Initial Capital Contributions

Each Partner shall make the initial capital contribution set forth in Article III and Schedule A hereto. Initial capital contributions shall be made on or before [__/__/____].

Forms of Contribution: Pursuant to Minn. Stat. § 321.0501, a Partner's contribution may consist of:

☐ Cash
☐ Property (tangible or intangible)
☐ Services rendered
☐ Promissory note or other obligation to contribute cash or property
☐ Contract for future services

Section 6.2 Valuation of Non-Cash Contributions

The fair market value of any non-cash contribution shall be determined by:

☐ Mutual agreement of all Partners
☐ Independent appraisal by a qualified appraiser selected by the General Partner(s)
☐ Other method: [________________________________]

Section 6.3 Additional Capital Contributions

Mandatory Additional Contributions:

☐ No Partner shall be required to make additional capital contributions beyond the initial contribution.

☐ Partners may be required to make additional capital contributions as follows:
[________________________________]
[________________________________]

Voluntary Additional Contributions:

A Partner may make additional capital contributions only with the consent of the General Partner(s) and in accordance with such terms as the General Partner(s) may determine.

Section 6.4 Capital Calls

If additional capital contributions are required:

(a) The General Partner(s) shall give written notice to each Partner specifying the total amount of the capital call, each Partner's proportionate share, and the date by which contributions must be made (not less than [____] days from the date of notice);

(b) Each Partner shall contribute their proportionate share based on their ownership percentage;

Section 6.5 Failure to Contribute

If a Partner fails to make a required capital contribution within the time specified, the General Partner(s) may, in their discretion:

(a) Treat the failure as a default and pursue remedies available at law or in equity;

(b) Reduce the defaulting Partner's ownership percentage proportionately;

(c) Treat the unpaid contribution as a loan from the Partnership to the defaulting Partner bearing interest at [____]% per annum;

(d) Permit other Partners to contribute the defaulting Partner's share, thereby increasing their ownership percentages proportionately;

(e) Exercise any other remedy set forth in this Agreement or available under applicable law.

Section 6.6 Capital Accounts

A separate capital account shall be maintained for each Partner. Each Partner's capital account shall be:

(a) Credited with: (i) the amount of money contributed by such Partner; (ii) the fair market value of property contributed by such Partner (net of liabilities assumed or taken subject to); (iii) allocations of Partnership profits and gains to such Partner; and (iv) any other amounts required by applicable Treasury Regulations;

(b) Debited with: (i) distributions of money to such Partner; (ii) the fair market value of property distributed to such Partner (net of liabilities assumed or taken subject to); (iii) allocations of Partnership losses and deductions to such Partner; and (iv) any other amounts required by applicable Treasury Regulations.

Section 6.7 No Interest on Capital

No Partner shall be entitled to receive interest on their capital contributions or capital account balance, except as otherwise expressly provided in this Agreement.

Section 6.8 Return of Capital

Except as provided in Article VII (Distributions) and Article XII (Dissolution), no Partner shall have the right to demand or receive the return of their capital contribution.

ARTICLE VII: ALLOCATION OF PROFITS AND LOSSES

Section 7.1 Allocation of Profits

Net profits of the Partnership for each fiscal year shall be allocated among the Partners as follows:

Option A - Pro Rata Allocation:
☐ In proportion to each Partner's ownership percentage as set forth in Schedule A.

Option B - Preferred Return with Residual Allocation:
☐ First, to the Partners in proportion to and to the extent of their respective Unreturned Capital Contributions until all Partners have received a cumulative preferred return of [____]% per annum on their Unreturned Capital Contributions;
☐ Second, the balance in proportion to each Partner's ownership percentage.

Option C - Special Allocation:
☐ [____]% to the General Partner(s) as a carried interest or incentive allocation;
☐ The balance to all Partners in proportion to their ownership percentages.

Option D - Custom Allocation:
☐ As follows: [________________________________]
[________________________________]

Section 7.2 Allocation of Losses

Net losses of the Partnership for each fiscal year shall be allocated among the Partners as follows:

Option A - Pro Rata Allocation:
☐ In proportion to each Partner's ownership percentage as set forth in Schedule A.

Option B - Limited Partner Loss Limitation:
☐ First, to the Limited Partners in proportion to their ownership percentages, but only to the extent of their positive capital account balances;
☐ Second, to the General Partner(s).

Option C - Custom Allocation:
☐ As follows: [________________________________]
[________________________________]

Section 7.3 Special Allocations

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

(a) Minimum Gain Chargeback: Notwithstanding any other provision of this Agreement, if there is a net decrease in Partnership minimum gain during any fiscal year, each Partner shall be specially allocated items of Partnership income and gain for such year in an amount equal to such Partner's share of the net decrease in Partnership minimum gain, as determined under Treasury Regulation Section 1.704-2(g).

(b) Partner Minimum Gain Chargeback: Notwithstanding any other provision of this Agreement (except the Minimum Gain Chargeback provision), if there is a net decrease in Partner nonrecourse debt minimum gain during any fiscal year, each Partner with a share of such Partner nonrecourse debt minimum gain shall be specially allocated items of Partnership income and gain for such year in accordance with Treasury Regulation Section 1.704-2(i).

(c) Qualified Income Offset: If any Partner unexpectedly receives any adjustments, allocations, or distributions 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 in an amount and manner sufficient to eliminate the deficit balance in such Partner's capital account as quickly as possible.

Section 7.4 Tax Allocations

For income tax purposes, each item of income, gain, loss, deduction, and credit shall be allocated among the Partners in the same manner as its correlative item of "book" income, gain, loss, or deduction is allocated pursuant to this Article VII, except as otherwise required by Section 704(c) of the Internal Revenue Code.

Section 7.5 Varying Interests

If the Partners' ownership percentages change during a fiscal year, profits and losses shall be allocated among the Partners using any method permitted by Section 706 of the Internal Revenue Code and the Treasury Regulations thereunder as selected by the General Partner(s).

ARTICLE VIII: DISTRIBUTIONS

Section 8.1 Distributions Generally

Pursuant to Minn. Stat. § 321.0504, a Partner does not have a right to receive a distribution before the dissolution and winding up of the Partnership unless the Partnership decides to make a distribution.

Section 8.2 Timing and Amount of Distributions

The General Partner(s), in their sole discretion, shall determine the timing and amount of distributions, taking into account:

(a) The Partnership's cash flow and working capital requirements;

(b) Reserves for contingencies, capital expenditures, and other Partnership needs;

(d) Debt service requirements; and

(e) Such other factors as the General Partner(s) deem relevant.

Section 8.3 Priority of Distributions

Distributions shall be made in the following order of priority:

Option A - Pro Rata Distributions:
☐ To all Partners in proportion to their ownership percentages.

Option B - Waterfall Distribution:
☐ First, to all Partners in proportion to their ownership percentages until each Partner has received cumulative distributions equal to their Unreturned Capital Contributions;
☐ Second, to all Partners in proportion to their ownership percentages until each Partner has received a cumulative preferred return of [____]% per annum on their Unreturned Capital Contributions;
☐ Third, [____]% to the General Partner(s) and [____]% to the Limited Partners in proportion to their ownership percentages.

Option C - Custom Distribution:
☐ As follows: [________________________________]
[________________________________]

Section 8.4 Tax Distributions

The General Partner(s) shall use reasonable efforts to distribute to each Partner, at least quarterly, an amount sufficient to enable such Partner to pay estimated income taxes attributable to Partnership income allocated to such Partner, calculated at the highest marginal tax rate applicable to individuals or corporations, as applicable.

Section 8.5 Distributions in Kind

The General Partner(s) may make distributions in kind of Partnership property. Any distribution in kind shall be made to the Partners in proportion to their ownership percentages, and the fair market value of such property shall be determined by the General Partner(s) in good faith.

Section 8.6 Limitations on Distributions

Pursuant to Minn. Stat. § 321.0508, the Partnership shall not make a distribution if after the distribution:

(a) The Partnership would not be able to pay its debts as they become due in the ordinary course of business; or

(b) The Partnership's total assets would be less than the sum of its total liabilities plus, unless this Agreement provides otherwise, the amount that would be needed if the Partnership were to be dissolved at the time of the distribution to satisfy the preferential rights of other Partners upon dissolution that are superior to the rights of the Partner receiving the distribution.

Section 8.7 Distribution upon Withdrawal

A withdrawing Partner shall be entitled to receive distributions only as provided in Article X (Withdrawal) and Article XII (Dissolution).

ARTICLE IX: ADMISSION OF NEW PARTNERS

Section 9.1 Admission of New General Partners

A new General Partner may be admitted to the Partnership only with the unanimous written consent of all existing General Partners and Limited Partners holding a majority of the Limited Partner interests.

Section 9.2 Admission of New Limited Partners

A new Limited Partner may be admitted to the Partnership:

(a) In connection with a transfer of a Partnership interest in accordance with Article X; or

(b) Upon the approval of the General Partner(s) and compliance with such terms and conditions as the General Partner(s) may establish.

Section 9.3 Conditions to Admission

As a condition to admission, each new Partner must:

(a) Execute and deliver to the Partnership a written instrument in form satisfactory to the General Partner(s) agreeing to be bound by all terms and conditions of this Agreement;

(b) Execute and deliver such other documents and instruments as the General Partner(s) may reasonably require;

(d) Provide such representations, warranties, and indemnities as the General Partner(s) may require; and

(e) Pay or reimburse the Partnership for all costs and expenses incurred in connection with such admission.

Section 9.4 Amendment of Records

Upon admission of a new Partner, the General Partner(s) shall amend Schedule A and, if required, file an amendment to the Certificate of Limited Partnership with the Minnesota Secretary of State.

ARTICLE X: TRANSFER OF PARTNERSHIP INTERESTS

Section 10.1 General Restriction on Transfers

No Partner may Transfer all or any portion of their Partnership interest except as expressly permitted by this Agreement. Any purported Transfer in violation of this Agreement shall be null and void.

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

Section 10.2 Transferable Interest

Pursuant to Minn. Stat. § 321.0701, a Partner's transferable interest consists solely of the Partner's right to receive distributions from the Partnership. A transfer of a Partner's transferable interest does not entitle the transferee to:

(a) Participate in the management or conduct of Partnership activities;

(b) Become a Partner; or

Section 10.3 Permitted Transfers

A Partner may Transfer all or any portion of their Partnership interest without consent:

(a) To Family Members: To the Partner's spouse, children, grandchildren, parents, or siblings, or to a trust for the benefit of any such persons;

(b) To Affiliates: If the Partner is an entity, to an Affiliate of such Partner;

(d) Estate Planning: To a revocable trust of which the Partner is the grantor and primary beneficiary.

Section 10.4 Right of First Refusal

Before any Transfer (other than Permitted Transfers), the transferring Partner must:

(a) Provide written notice to the Partnership and all other Partners specifying the proposed transferee, the terms of the proposed Transfer, and the portion of the Partnership interest to be transferred;

(b) The Partnership shall have [____] days to elect to purchase the Partnership interest on the same terms;

(c) If the Partnership does not exercise its right, the other Partners shall have [____] additional days to elect to purchase the Partnership interest pro rata based on their ownership percentages;

(d) If neither the Partnership nor the other Partners exercise their rights, the transferring Partner may complete the Transfer to the proposed transferee on the same terms, provided the Transfer is completed within [____] days.

Section 10.5 Admission of Transferee as Partner

A transferee of a Partnership interest shall be admitted as a Partner only if:

(a) The transferring Partner has complied with all requirements of this Article X;

(b) For Limited Partner interests, the General Partner(s) consent to the admission (which consent shall not be unreasonably withheld);

(d) The transferee satisfies all conditions to admission set forth in Section 9.3.

Section 10.6 Charging Orders

Pursuant to Minn. Stat. § 321.0703, a creditor of a Partner may obtain a charging order against the Partner's transferable interest. A charging order constitutes a lien on the Partner's transferable interest and requires the Partnership to pay over to the creditor any distributions that would otherwise be made to the Partner. A charging order does not entitle the creditor to become a Partner or to exercise any Partner rights.

Section 10.7 Effect of Transfer

Upon any Transfer of a Partnership interest:

(a) The transferring Partner shall remain liable for all obligations to the Partnership arising before the Transfer;

(b) The transferee shall be bound by all terms of this Agreement;

(c) The Partnership shall be entitled to treat the transferor as the owner of the interest until written notice of the Transfer is received; and

(d) The General Partner(s) shall amend Schedule A and file any required amendments with the Minnesota Secretary of State.

ARTICLE XI: WITHDRAWAL AND DISSOCIATION

Section 11.1 General Partner Dissociation

A General Partner shall be dissociated from the Partnership upon the occurrence of any of the following events:

(a) The General Partner's voluntary withdrawal by written notice to the Partnership (effective upon the date stated in the notice or, if no date is stated, [____] days after receipt);

(b) An event agreed to in this Agreement as causing the General Partner's dissociation;

(d) The General Partner's expulsion by unanimous vote of the other Partners for:

Material breach of this Agreement;
Conduct that makes it not reasonably practicable to carry on Partnership business with such General Partner;
Willful or persistent commission of misconduct; or
Engaging in conduct relating to Partnership business that makes such General Partner unfit to participate in Partnership activities;

(e) The General Partner's expulsion by judicial order;

(f) The General Partner becoming a debtor in bankruptcy;

(g) The General Partner's death or incapacity (if an individual);

(h) The termination of a General Partner that is a trust or estate;

(i) The dissolution of a General Partner that is not an individual; or

(j) Any other event specified by law as causing dissociation.

Section 11.2 Limited Partner Dissociation

A Limited Partner shall be dissociated from the Partnership upon the occurrence of any of the following events:

(a) The Limited Partner's voluntary withdrawal by written notice to the Partnership (effective upon the date stated in the notice or, if no date is stated, [____] days after receipt);

(b) An event agreed to in this Agreement as causing the Limited Partner's dissociation;

(d) The Limited Partner becoming a debtor in bankruptcy;

(e) The Limited Partner's death or incapacity (if an individual);

(f) The termination of a Limited Partner that is a trust or estate;

(g) The dissolution of a Limited Partner that is not an individual; or

(h) The transfer of all of the Limited Partner's transferable interest.

Section 11.3 Effect of Dissociation - General Partner

Upon a General Partner's dissociation:

(a) The General Partner's right to participate in management and conduct of Partnership activities terminates;

(b) The General Partner's fiduciary duties terminate, except with respect to matters arising before dissociation;

(c) The dissociated General Partner may bind the Partnership for up to two (2) years after dissociation if the other party reasonably believed the General Partner was still a Partner (unless the other party had notice of the dissociation);

(d) The Partnership shall file a Statement of Dissociation with the Minnesota Secretary of State.

Section 11.4 Effect of Dissociation - Limited Partner

Upon a Limited Partner's dissociation:

(a) The Limited Partner's right to participate in Partnership activities as a Limited Partner terminates;

(b) The Limited Partner's obligation of good faith and fair dealing terminates, except with respect to matters arising before dissociation;

Section 11.5 Distribution upon Dissociation

A dissociated Partner shall be entitled to receive:

☐ The fair market value of the Partner's Partnership interest as of the date of dissociation, determined by:
☐ Mutual agreement
☐ Independent appraisal
☐ Formula: [________________________________]

☐ Payment shall be made: ☐ In a lump sum within [____] days ☐ In installments over [____] months/years with interest at [____]%

☐ No payment until dissolution of the Partnership (Partner retains only a transferable interest)

ARTICLE XII: DISSOLUTION AND WINDING UP

Section 12.1 Events Causing Dissolution

The Partnership shall be dissolved upon the first to occur of the following:

(a) The expiration of the Partnership's term (if any);

(b) An event or circumstance specified in this Agreement as causing dissolution;

(c) The affirmative vote of all General Partners and Limited Partners holding a majority of the Limited Partner interests;

(d) Ninety (90) days after the dissociation of the last General Partner, unless a majority of the remaining Limited Partners consent to continue the Partnership and admit a new General Partner within that period;

(e) Entry of a judicial decree of dissolution; or

(f) Administrative dissolution by the Minnesota Secretary of State for failure to file annual renewals, which may be cured by reinstatement.

Section 12.2 Continuation After Dissolution of General Partner

Upon the dissociation of the last General Partner, the Partnership shall not dissolve if:

(a) Within ninety (90) days after the dissociation, Limited Partners holding a majority of Limited Partner interests consent in writing to continue the Partnership; and

(b) Within ninety (90) days after the dissociation, a new General Partner is admitted to the Partnership.

Section 12.3 Winding Up

Upon dissolution, the Partnership shall be wound up by the General Partner(s) (or, if no General Partner remains, by a person appointed by Limited Partners holding a majority of Limited Partner interests or by a court).

The person winding up the Partnership shall:

(a) Preserve the Partnership business and assets as a going concern for a reasonable time;

(b) Collect all accounts receivable;

(d) Liquidate Partnership assets;

(e) Settle litigation and claims;

(f) File all required tax returns;

(g) Give written notice of dissolution to creditors and all persons having dealings with the Partnership;

(h) File a Statement of Dissolution with the Minnesota Secretary of State; and

(i) Distribute the remaining assets to the Partners.

Section 12.4 Order of Distribution upon Liquidation

Upon liquidation, Partnership assets shall be distributed in the following order:

(a) First: To creditors, including Partners who are creditors (to the extent permitted by law), in satisfaction of the Partnership's liabilities;

(b) Second: To establish reserves for contingent or unliquidated liabilities in amounts determined by the General Partner(s) (or person winding up) to be reasonably necessary;

(c) Third: To Partners in respect of their positive capital account balances, in proportion to such balances (after giving effect to all allocations for the fiscal year in which liquidation occurs).

Section 12.5 Deficit Capital Accounts

No Partner shall be required to restore a deficit in their capital account upon dissolution, except:

☐ General Partners shall be obligated to restore any deficit in their capital accounts
☐ No Partner shall be obligated to restore any deficit

Section 12.6 Certificate of Termination

Upon completion of winding up, the General Partner(s) (or person winding up) shall file a Statement of Termination with the Minnesota Secretary of State and take all other actions necessary to terminate the Partnership's existence.

ARTICLE XIII: FIDUCIARY DUTIES

Section 13.1 General Partner Fiduciary Duties

Pursuant to Minn. Stat. § 321.0408, each General Partner owes to the Partnership and the other Partners the fiduciary duties of loyalty and care.

Section 13.2 Duty of Loyalty

The duty of loyalty of a General Partner includes:

(a) To account to the Partnership and hold as trustee for it any property, profit, or benefit derived by the General Partner in the conduct of the Partnership's activities or from use of Partnership property, including appropriation of a Partnership opportunity;

(b) To refrain from dealing with the Partnership on behalf of a person having an interest adverse to the Partnership; and

Section 13.3 Duty of Care

The duty of care of a General Partner in the conduct and winding up of Partnership activities is limited to refraining from engaging in:

(a) Grossly negligent or reckless conduct;

(b) Intentional misconduct; or

Section 13.4 Good Faith and Fair Dealing

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

Section 13.5 Limited Partner Duties

Pursuant to Minn. Stat. § 321.0305, a Limited Partner does not have any fiduciary duty to the Partnership or any other Partner solely by reason of being a Limited Partner. A Limited Partner must discharge their duties and exercise their rights consistently with the contractual obligation of good faith and fair dealing.

Section 13.6 Waiver and Modification of Fiduciary Duties

To the fullest extent permitted by Minn. Stat. § 321.0110:

(a) The Partners acknowledge and agree that this Agreement modifies and limits the fiduciary duties owed by the General Partner(s) as expressly set forth herein;

(b) A General Partner does not violate a duty or obligation under this Agreement merely because the General Partner's conduct furthers the General Partner's own interest;

(c) Transactions between the Partnership and a General Partner or its Affiliates shall not be voidable solely because of such relationship if the transaction is fair to the Partnership or is approved by a majority of the disinterested Partners.

ARTICLE XIV: INDEMNIFICATION AND LIABILITY

Section 14.1 Indemnification of General Partners

The Partnership shall indemnify, defend, and hold harmless each General Partner and their Affiliates, officers, directors, employees, agents, and representatives (collectively, "Indemnitees") from and against any and all losses, claims, damages, liabilities, expenses (including reasonable attorneys' fees and costs), judgments, fines, settlements, and other amounts arising from any claim, demand, action, suit, or proceeding (whether civil, criminal, administrative, or investigative) in which an Indemnitee may be involved, as a party or otherwise, by reason of the Indemnitee's status as a General Partner or manager of the Partnership, or the Indemnitee's performance of duties on behalf of the Partnership.

Section 14.2 Conditions to Indemnification

Indemnification under Section 14.1 shall be provided only if the Indemnitee:

(a) Acted in good faith;

(b) Reasonably believed their conduct was in, or not opposed to, the best interests of the Partnership; and

Section 14.3 Exclusions from Indemnification

Notwithstanding Section 14.1, no indemnification shall be provided to an Indemnitee for:

(a) Acts or omissions constituting gross negligence, willful misconduct, or fraud;

(b) Acts or omissions constituting a breach of the Indemnitee's fiduciary duties under this Agreement;

(d) Any matter settled or compromised without the prior written consent of the Partnership.

Section 14.4 Advancement of Expenses

The Partnership shall advance to any Indemnitee reasonable attorneys' fees and other costs and expenses incurred in connection with the defense of any claim for which indemnification may be sought, upon receipt of an undertaking by the Indemnitee to repay such amounts if it is ultimately determined that the Indemnitee is not entitled to indemnification.

Section 14.5 Indemnification of Limited Partners

The Partnership shall indemnify each Limited Partner against any claim, demand, or action asserted against such Limited Partner solely by reason of being a Limited Partner, to the extent such claim, demand, or action is not caused by such Limited Partner's own acts or omissions.

Section 14.6 Limitation of Liability

To the fullest extent permitted by law:

(a) No General Partner shall be personally liable to the Partnership or any Partner for monetary damages for breach of fiduciary duty, except for:

Acts or omissions not in good faith or involving intentional misconduct or knowing violation of law;
Any transaction from which the General Partner derived an improper personal benefit;

(b) No Limited Partner shall be personally liable for the debts, obligations, or liabilities of the Partnership solely by reason of being a Limited Partner, regardless of the extent of the Limited Partner's participation in management.

Section 14.7 Insurance

The Partnership may purchase and maintain insurance on behalf of any General Partner, Limited Partner, or other agent against any liability asserted against such person in their capacity as such, whether or not the Partnership would have the power to indemnify such person under this Article XIV.

ARTICLE XV: LIMITED LIABILITY LIMITED PARTNERSHIP ELECTION

Section 15.1 LLLP Election

☐ The Partnership DOES elect to be a Limited Liability Limited Partnership (LLLP) under Minn. Stat. § 321.0102(9).

☐ The Partnership DOES NOT elect to be a Limited Liability Limited Partnership at this time.

Section 15.2 Effect of LLLP Status

If the Partnership elects LLLP status:

(a) The Certificate of Limited Partnership shall include a statement that the Partnership is an LLLP;

(b) Pursuant to Minn. Stat. § 321.0404(c), a General Partner shall not be personally liable for Partnership obligations solely by reason of being or acting as a General Partner;

Section 15.3 Subsequent Election

The Partnership may elect LLLP status at any time after formation by:

(a) Amending this Agreement with the consent of all General Partners and Limited Partners holding a majority of Limited Partner interests;

(b) Filing an amendment to the Certificate of Limited Partnership with the Minnesota Secretary of State; and

ARTICLE XVI: BOOKS, RECORDS, AND ACCOUNTING

Section 16.1 Books and Records

The General Partner(s) shall maintain at the Partnership's principal place of business the following records:

(a) A current list of the full name and last known business, residence, or mailing address of each Partner;

(b) A copy of the Certificate of Limited Partnership and all amendments thereto;

(d) Copies of the Partnership's federal, state, and local income tax returns and financial statements for the three (3) most recent years;

(e) Minutes of Partner meetings and written consents to action;

(f) A writing setting forth:

The amount of cash and a description and statement of the agreed value of other property contributed by each Partner;
The times at which or events upon which additional contributions are to be made;
Any events upon which the Partnership is to be dissolved;
The date on which each Partner became a Partner;

(g) Financial statements and supporting records; and

(h) Such other records as required by the Act or determined by the General Partner(s) to be necessary or appropriate.

Section 16.2 Fiscal Year

The fiscal year of the Partnership shall be the calendar year, unless otherwise determined by the General Partner(s).

Section 16.3 Accounting Method

The Partnership's books and records shall be kept using the:

☐ Cash method of accounting
☐ Accrual method of accounting

Section 16.4 Financial Statements

The General Partner(s) shall cause to be prepared and distributed to each Partner:

(a) Within [____] days after the end of each fiscal year, annual financial statements, including a balance sheet, statement of income, and statement of cash flows;

(b) Within [____] days after the end of each fiscal quarter, quarterly financial reports;

Section 16.5 Tax Matters Partner

Tax Matters Partner/Partnership Representative: [________________________________] is hereby designated as the Tax Matters Partner (for tax years beginning before January 1, 2018) and Partnership Representative (for tax years beginning on or after January 1, 2018) for purposes of the Internal Revenue Code.

The Partnership Representative shall have the authority to:

(a) Receive notices from the Internal Revenue Service;

(b) Represent the Partnership in tax audits and proceedings;

(d) Settle tax controversies; and

(e) Make elections on behalf of the Partnership, including the election under Section 6226 of the Internal Revenue Code to push out adjustments to Partners.

Section 16.6 Tax Returns

The General Partner(s) shall cause the Partnership's federal, state, and local tax returns to be prepared and timely filed. The General Partner(s) shall furnish to each Partner within [____] days after the end of each fiscal year (or as soon as reasonably practicable) a Schedule K-1 (or equivalent) reflecting such Partner's share of Partnership income, gain, loss, deductions, and credits for the fiscal year.

ARTICLE XVII: MINNESOTA SECRETARY OF STATE FILINGS

Section 17.1 Certificate of Limited Partnership

The General Partner(s) shall file a Certificate of Limited Partnership with the Minnesota Secretary of State in accordance with Minn. Stat. § 321.0201. The Certificate shall include:

(a) The name of the Partnership (which must include "limited partnership" or "L.P." or "LP");

(b) The street address of the Partnership's designated office in Minnesota;

(d) The name and mailing address of each General Partner; and

(e) Whether the Partnership is a Limited Liability Limited Partnership.

Filing Fee: $100 (mail) or $120 (in-person/online)

Section 17.2 Annual Renewal

The Partnership shall file an annual renewal with the Minnesota Secretary of State once each calendar year in accordance with Minn. Stat. § 321.0210.

Filing Fee: No charge for annual renewal

Reinstatement Fee (if dissolved for failure to renew): $25 (mail) or $45 (in-person/online)

Section 17.3 Amendments

The General Partner(s) shall file an amendment to the Certificate of Limited Partnership within [____] days after:

(a) Any change in the Partnership's name;

(b) Any change in the address of the Partnership's designated office;

(d) Admission of a new General Partner;

(e) Dissociation of a General Partner; or

(f) Any change in the LLLP status.

Filing Fee: $50 (mail) or $70 (in-person/online)

Section 17.4 Statements of Dissociation, Dissolution, and Termination

The General Partner(s) shall file with the Minnesota Secretary of State:

(a) A Statement of Dissociation upon the dissociation of a General Partner;

(b) A Statement of Dissolution upon the dissolution of the Partnership; and

Filing Fee: $50 (mail) or $70 (in-person/online) for each statement

Section 17.5 Filing Address

All filings shall be submitted to:

Minnesota Secretary of State
First National Bank Building
332 Minnesota Street, Suite N201
Saint Paul, MN 55101

Or online through the Business & Liens System at www.sos.mn.gov

ARTICLE XVIII: MISCELLANEOUS PROVISIONS

Section 18.1 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota, including the Minnesota Uniform Limited Partnership Act (Minn. Stat. Chapter 321), without regard to conflicts of law principles.

Section 18.2 Dispute Resolution

☐ Litigation: Any dispute arising out of or relating to this Agreement shall be resolved exclusively in the state or federal courts located in [________________________________] County, Minnesota. Each Partner consents to the jurisdiction of such courts.

☐ Mediation: Before commencing any litigation or arbitration, the Partners shall first attempt to resolve disputes through mediation conducted by a mutually agreed mediator in [________________________________], Minnesota.

☐ Arbitration: Any dispute arising out of or relating to this Agreement shall be resolved by binding arbitration in [________________________________], Minnesota, in accordance with the rules of:
☐ The American Arbitration Association
☐ JAMS
☐ Other: [________________________________]

Section 18.3 Waiver of Jury Trial

EACH PARTNER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PARTNERSHIP.

Initials: _______ _______ _______ _______

Section 18.4 Entire Agreement

This Agreement, including all Schedules and Exhibits attached hereto, constitutes the entire agreement among the Partners with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written.

Section 18.5 Amendments

This Agreement may be amended only by a written instrument signed by all General Partners and Limited Partners holding at least [____]% of the Limited Partner interests, except that:

(a) Schedule A may be amended by the General Partner(s) to reflect changes in Partners and ownership percentages resulting from transactions permitted by this Agreement;

(b) Amendments required by law may be made by the General Partner(s) without Partner consent.

Section 18.6 Severability

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

Section 18.7 Notices

All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed given:

(a) When delivered personally;

(b) When sent by confirmed email (if provided below);

(d) Three (3) business days after deposit in the United States mail, postage prepaid, certified or registered, return receipt requested;

addressed to the Partner at the address set forth in Schedule A or such other address as the Partner may designate by notice.

Section 18.8 Waiver

No waiver of any provision of this Agreement shall be effective unless in writing and signed by the waiving party. No failure or delay in exercising any right shall operate as a waiver thereof.

Section 18.9 Counterparts

This Agreement 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. Electronic signatures shall be deemed original signatures for all purposes.

Section 18.10 Binding Effect

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

Section 18.11 Construction

(a) Headings are for convenience only and shall not affect interpretation;

(b) "Including" means "including without limitation";

(d) References to Sections, Articles, Schedules, and Exhibits refer to this Agreement unless otherwise specified;

(e) This Agreement shall not be construed against the drafter.

Section 18.12 Attorneys' Fees

In any action to enforce or interpret this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs from the non-prevailing party.

Section 18.13 No Third-Party Beneficiaries

This Agreement is for the sole benefit of the Partners and their permitted successors and assigns. Nothing in this Agreement shall confer upon any other person any legal or equitable right, benefit, or remedy.

Section 18.14 Confidentiality

Each Partner agrees to keep confidential all non-public information concerning the Partnership and its business, except as required by law or with the prior written consent of the General Partner(s).

Section 18.15 Further Assurances

Each Partner agrees to execute and deliver such additional documents and take such further actions as may be reasonably necessary to carry out the purposes of this Agreement.

SIGNATURE PAGE

IN WITNESS WHEREOF, the undersigned Partners have executed this Limited Partnership Agreement as of the date first written above.