Limited Partnership Agreement - State of South Carolina

LIMITED PARTNERSHIP AGREEMENT

OF

[________________________________]

A SOUTH CAROLINA LIMITED PARTNERSHIP

THIS AGREEMENT IS SUBJECT TO ARBITRATION UNDER SECTION 16.3.

Effective Date: [__/__/____]

RECITALS

THIS LIMITED PARTNERSHIP AGREEMENT (this "Agreement") is entered into and made effective as of [__/__/____] (the "Effective Date"), by and among:

GENERAL PARTNER(S):

[________________________________] (the "General Partner"), with a principal address at [________________________________], [________________________________], South Carolina [____]

LIMITED PARTNER(S):

[________________________________] (the "Limited Partner"), with a principal address at [________________________________], [________________________________], South Carolina [____]

(The General Partner and Limited Partner(s) are collectively referred to herein as the "Partners" and individually as a "Partner.")

WITNESSETH:

WHEREAS, the Partners desire to form a limited partnership under the laws of the State of South Carolina, pursuant to the South Carolina Uniform Limited Partnership Act, S.C. Code Ann. § 33-42-10 et seq. (the "Act"); and

WHEREAS, a Certificate of Limited Partnership has been or will be filed with the South Carolina Secretary of State in accordance with S.C. Code Ann. § 33-42-210; and

WHEREAS, the Partners desire to set forth their respective rights, duties, obligations, and liabilities with respect to the Partnership and to provide for the governance, management, and operation thereof;

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

ARTICLE I — DEFINITIONS

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

(a) "Act" means the South Carolina Uniform Limited Partnership Act, S.C. Code Ann. § 33-42-10 et seq., as amended from time to time.

(b) "Affiliate" means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Person. The term "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.

(c) "Agreement" means this Limited Partnership Agreement, as amended, modified, supplemented, or restated from time to time.

(d) "Bankruptcy" means, with respect to any Person, (i) the filing of a voluntary petition under federal Bankruptcy Code or any state insolvency statute; (ii) the commencement of an involuntary proceeding that is not dismissed within ninety (90) days; (iii) an assignment for the benefit of creditors; or (iv) the appointment of a receiver, trustee, or liquidator for such Person or a substantial part of its assets.

(e) "Capital Account" means, with respect to each Partner, the account maintained for such Partner in accordance with Section 6.4 of this Agreement and the rules of Treasury Regulation § 1.704-1(b)(2)(iv).

(f) "Capital Contribution" means, with respect to each Partner, the total amount of cash and the fair market value of any property contributed to the Partnership by such Partner (net of any liabilities assumed by the Partnership or to which the property is subject). Contributions may take the forms permitted by S.C. Code Ann. § 33-42-810.

(g) "Certificate" means the Certificate of Limited Partnership of the Partnership filed with the South Carolina Secretary of State pursuant to S.C. Code Ann. § 33-42-210, together with all amendments and restatements thereof.

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

(i) "Distributable Cash" means cash of the Partnership available for distribution after payment of or provision for all operating expenses, debt obligations, capital expenditures, reserves, and other amounts the General Partner determines in its reasonable business judgment to be necessary or appropriate.

(j) "Fiscal Year" means the fiscal year of the Partnership, which shall be the calendar year unless otherwise determined by the General Partner in compliance with the Code.

(k) "General Partner" means any Person admitted to the Partnership as a general partner in accordance with the Act and this Agreement, and named in the Certificate.

(l) "Interest" or "Partnership Interest" means the entire ownership interest of a Partner in the Partnership, including the Partner's rights to distributions, allocations, information, and participation in management (if applicable), together with the obligations of such Partner under this Agreement and the Act.

(m) "Limited Partner" means any Person admitted to the Partnership as a limited partner in accordance with S.C. Code Ann. § 33-42-410 and this Agreement.

(n) "Majority in Interest" means Partners (other than the General Partner in its capacity as General Partner) holding more than fifty percent (50%) of the aggregate Percentage Interests.

(o) "Net Profits" and "Net Losses" mean the income, gain, loss, deductions, and credits of the Partnership as determined for federal income tax purposes, with adjustments as required by this Agreement.

(p) "Percentage Interest" means the percentage set forth opposite each Partner's name on Exhibit A, as adjusted from time to time.

(q) "Person" means any individual, partnership, limited partnership, limited liability company, corporation, trust, estate, association, joint venture, governmental authority, or other entity.

(r) "Partnership" means the limited partnership formed under this Agreement and the Act.

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

(t) "Treasury Regulations" means the income tax regulations promulgated under the Code, as amended from time to time.

(u) "Adjusted Capital Account Deficit" means the amount, if any, by which a Partner's Capital Account would be below zero at the end of a Fiscal Year after crediting that Partner's enforceable deficit restoration obligation, if any, and shares of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain under Treasury Regulation §§ 1.704-2(g)(1) and 1.704-2(i)(5), and after reducing the account by the reasonably expected items described in Treasury Regulation § 1.704-1(b)(2)(ii)(d)(4), (5), and (6).

(v) "Partnership Minimum Gain," "Partner Nonrecourse Debt Minimum Gain," "Nonrecourse Deductions," and "Partner Nonrecourse Deductions" have the meanings and calculation rules in Treasury Regulation § 1.704-2.

ARTICLE II — FORMATION AND ORGANIZATION

Section 2.1 Formation. The Partners hereby form a limited partnership under and pursuant to the Act. A Certificate of Limited Partnership shall be executed and filed (or has been filed) with the South Carolina Secretary of State, Business Filings Division, in accordance with S.C. Code Ann. § 33-42-210. The General Partner is authorized to execute, deliver, and file any amendments to the Certificate and any other documents necessary or appropriate under the Act.

Section 2.2 Name. The name of the Partnership shall be:

[________________________________], Limited Partnership

Under S.C. Code Ann. § 33-42-30, the name must contain "limited partnership" or the abbreviation "LP" or "L.P." The name may contain a Limited Partner's name only if it is also the name of a General Partner or the corporate name of a corporate General Partner, or if the business operated under that name before the Limited Partner's admission.

Section 2.3 Specified Office and Agent. The Partnership shall continuously maintain an office in South Carolina where the records required by S.C. Code Ann. § 33-42-60 are kept and an agent for service of process meeting S.C. Code Ann. § 33-42-50.

The initial registered agent shall be: [________________________________]

The initial registered office shall be at:
[________________________________]
[________________________________], South Carolina [____]
County of [________________________________]

The General Partner may change the registered agent or office by filing appropriate notice with the Secretary of State.

Section 2.4 Principal Office. The principal office and place of business of the Partnership shall be at:

[________________________________]
[________________________________], South Carolina [____]

The General Partner may change the principal office from time to time and shall provide notice to all Partners within fifteen (15) days.

Section 2.5 Purpose. The purpose of the Partnership shall be to:

[________________________________]
[________________________________]
[________________________________]

and to engage in any and all lawful activities incidental or related thereto, and to exercise all powers granted to limited partnerships under the Act.

Section 2.6 Term. The Partnership shall commence when the Certificate is filed with the South Carolina Secretary of State (or on a later time specified in the Certificate) and shall continue until the earlier of dissolution under Article XIV or the latest dissolution date required to be stated in the Certificate by S.C. Code Ann. § 33-42-210.

Latest dissolution date stated in the Certificate: [__/__/____]

Section 2.7 Qualification in Other Jurisdictions. The General Partner is authorized to cause the Partnership to qualify to do business in any other state or jurisdiction as may be necessary or desirable.

Section 2.8 Title to Property. All property owned by the Partnership shall be owned by the Partnership as an entity and no Partner shall have any individual ownership interest in such property. Partnership property is not subject to the claims of a Partner's separate creditors, except as provided by the Act.

Section 2.9 Authority of General Partner. The General Partner's authority and any limits on that authority are set forth in this Agreement and the filed Certificate of Limited Partnership, as applicable.

ARTICLE III — PARTNERS

Section 3.1 General Partner. The name, address, and initial Capital Contribution of the General Partner are as follows:

Section 3.2 Limited Partners. The names, addresses, and initial Capital Contributions of the Limited Partners are as follows:

Section 3.3 Partner Schedule. The complete schedule of Partners is set forth on Exhibit A, which shall be updated by the General Partner to reflect any changes.

ARTICLE IV — MANAGEMENT AND OPERATIONS

Section 4.1 Management by General Partner. The management and conduct of the business of the Partnership shall be vested exclusively in the General Partner, who shall have full, complete, and exclusive power and authority to manage, control, and operate the Partnership business and affairs, subject only to the limitations expressly set forth in this Agreement.

Section 4.2 Powers of the General Partner. Without limiting the generality of Section 4.1, the General Partner shall have the power and authority, on behalf of the Partnership, to:

(a) Acquire, hold, manage, improve, develop, lease, sell, convey, mortgage, encumber, and otherwise deal with real and personal property;

(b) Enter into, execute, deliver, and perform contracts, agreements, leases, and other instruments;

(c) Borrow money, issue evidences of indebtedness, and grant liens on Partnership assets as security;

(d) Open and maintain bank accounts, investment accounts, and brokerage accounts;

(e) Employ, engage, retain, compensate, and dismiss employees, independent contractors, attorneys, accountants, and other professionals;

(f) Commence, prosecute, defend, settle, and compromise actions, suits, and proceedings;

(g) Make distributions to Partners in accordance with this Agreement;

(h) Pay organizational expenses, operating expenses, and other costs;

(i) Obtain and maintain insurance for Partnership properties and activities;

(j) Prepare and file all tax returns and other required filings;

(k) Execute and deliver documents and instruments on behalf of the Partnership; and

(l) Take all other actions customary or reasonably related to the Partnership business.

Section 4.3 Actions Requiring Consent of Limited Partners. Notwithstanding the General Partner's broad authority, the following actions require the prior written consent of a Majority in Interest of the Limited Partners:

(a) Sale, exchange, lease, mortgage, or other disposition of all or substantially all Partnership assets outside the ordinary course of business;

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

(c) Admission of a new General Partner;

(d) Amendment to this Agreement that materially and adversely affects the rights of the Limited Partners;

(e) Any single transaction or related series of transactions involving expenditures exceeding $[________________________________];

(f) Filing a voluntary petition in bankruptcy or making an assignment for the benefit of creditors;

(g) Transactions between the Partnership and the General Partner or an Affiliate of the General Partner, unless on arm's-length terms;

(h) Issuance of additional Partnership Interests; and

(i) Voluntary dissolution of the Partnership except as provided in Article XIV.

Section 4.4 Duties of General Partner. The General Partner shall:

(a) Devote such time and attention to Partnership business as is reasonably necessary;

(b) Maintain complete and accurate books and records;

(c) File the Certificate and all amendments with the South Carolina Secretary of State;

(d) File documents required for the Partnership by the State of South Carolina;

(e) Prepare and file all federal, state, and local tax returns and reports;

(f) Maintain appropriate insurance; and

(g) Provide reports and information to Limited Partners as required.

Section 4.5 Compensation of General Partner. The General Partner shall be entitled to receive:

(a) A management fee of $[________________________________] per [month/quarter/year] (the "Management Fee"); and

(b) Reimbursement for all reasonable out-of-pocket expenses incurred in connection with Partnership business.

The Management Fee is intended as a guaranteed payment under 26 U.S.C. § 707(c) to the extent it is determined without regard to Partnership income. Expense reimbursements are separate from the Management Fee and are not designated as guaranteed payments by this Agreement; the Partnership's tax adviser should determine their treatment.

Section 4.6 Other Activities. The General Partner and its Affiliates may engage in other business activities, whether or not similar to Partnership business, and shall not be required to present business opportunities to the Partnership. The doctrine of corporate opportunity shall not apply to the General Partner.

Section 4.7 Delegation. The General Partner may delegate any of its powers and duties to one or more Persons, but shall remain responsible for performance of any delegated duties.

Section 4.8 Fiduciary Duties. The General Partner owes the Partnership and the other Partners the fiduciary duties of loyalty and care. The General Partner shall discharge its duties in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner it reasonably believes to be in the best interests of the Partnership.

ARTICLE V — RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Section 5.1 No Participation in Management. Except as otherwise provided in this Agreement, no Limited Partner shall participate in the management or control of Partnership business. No Limited Partner shall have the power to bind the Partnership or act on its behalf.

Section 5.2 Limited Liability. Pursuant to S.C. Code Ann. § 33-42-430, a limited partner is not liable for the obligations of the limited partnership unless the limited partner is also a general partner or, in addition to the exercise of rights and powers as a limited partner, the limited partner participates in the control of the business. The statutory safe harbor covers the activities listed in § 33-42-430(b); voting on other matters under this Agreement does not automatically receive that protection.

Section 5.3 Safe Harbor Activities. Without limiting the foregoing, pursuant to S.C. Code Ann. § 33-42-430(b), a limited partner does not participate in the control of the business by engaging in activities including, but not limited to:

(a) Being a contractor for or an agent or employee of the Partnership or of the General Partner or being an officer, director, or shareholder of a General Partner that is a corporation;

(b) Consulting with and advising the General Partner regarding Partnership business;

(c) Acting as surety for the Partnership or guaranteeing one or more obligations of the Partnership;

(d) Bringing a derivative action on behalf of the Partnership;

(e) Requesting or attending a meeting of Partners;

(f) Proposing, approving, or disapproving dissolution, a transfer of substantially all assets, nonordinary debt, a change in the nature of the business, admission or removal of a partner, a partner conflict transaction, or an amendment to this Agreement or the Certificate; or

(g) Winding up the Partnership as permitted under the Act.

Section 5.4 Voting Rights. Each Limited Partner shall have the right to vote on matters requiring Limited Partner consent as specified in this Agreement. Voting shall be in proportion to Percentage Interests.

Section 5.5 Right to Information. Each Limited Partner shall be entitled to:

(a) Inspect and copy Partnership records at the principal office during regular business hours upon reasonable request, in accordance with S.C. Code Ann. § 33-42-450;

(b) Receive a copy of Partnership tax returns within ninety (90) days after each Fiscal Year;

(c) Receive an annual financial report within one hundred twenty (120) days after each Fiscal Year;

(d) Receive a Schedule K-1 within the time required by law; and

(e) Obtain such other information concerning Partnership affairs as is just and reasonable.

Section 5.6 No Withdrawal. No Limited Partner may withdraw from the Partnership prior to dissolution and winding up, except as provided in Article XI.

ARTICLE VI — CAPITAL CONTRIBUTIONS

Section 6.1 Initial Capital Contributions. Each Partner shall make the initial Capital Contribution set forth on Exhibit A on or before [__/__/____], or at such other time as the General Partner may determine.

Section 6.2 Additional Capital Contributions.

(a) Select one:

☐ No additional Capital Contributions shall be required.
☐ Additional Capital Contributions may be required upon the terms below.

(b) If additional contributions are permitted, the General Partner may request additional contributions from Partners in proportion to their Percentage Interests upon not less than thirty (30) days' prior written notice.

(c) Pursuant to S.C. Code Ann. § 33-42-820, a Partner's obligation to make a contribution is not excused by death, disability, or other inability to perform. If any Partner defaults on a required contribution, the General Partner may:

(i) Pursue remedies available at law or equity;

(ii) Permit other Partners to contribute the defaulting Partner's share with corresponding Percentage Interest adjustments;

(iii) Treat the unpaid amount as a loan from the Partnership at [____]% per annum interest; or

(iv) Proportionally reduce the defaulting Partner's Percentage Interest.

Section 6.3 No Interest. No Partner shall receive interest on Capital Contributions, except as expressly provided.

Section 6.4 Capital Accounts. A separate Capital Account shall be maintained for each Partner in accordance with Treasury Regulation § 1.704-1(b)(2)(iv). Each Partner's Capital Account shall be:

(a) Increased by: (i) cash contributed; (ii) the fair market value of property contributed (net of liabilities); and (iii) allocations of Net Profits and items of income or gain;

(b) Decreased by: (i) cash distributed; (ii) the fair market value of property distributed (net of liabilities); (iii) allocations of Net Losses and items of deduction or loss; and (iv) expenditures under Code § 705(a)(2)(B).

On a transfer of all or part of an interest, the Capital Account attributable to the transferred interest shall carry over to a transferee treated as a partner for federal income tax purposes, as required by Treasury Regulation § 1.704-1(b)(2)(iv)(l).

Section 6.5 Return of Capital. No Partner may demand return of Capital Contributions except upon dissolution or as expressly provided. Under S.C. Code Ann. § 33-42-1080, a partner who receives a return of contribution in violation of the partnership agreement or the Act may be compelled to return such contribution.

Section 6.6 Form of Contribution. Pursuant to S.C. Code Ann. § 33-42-810, the contribution of a Partner may be in cash, property, services rendered, a promissory note, or other obligation to contribute cash, property, or services. Non-cash contributions shall be valued by agreement of the Partners or independent appraisal.

ARTICLE VII — ALLOCATIONS OF PROFITS AND LOSSES

Section 7.1 Allocation of Net Profits. After giving effect to special allocations in Sections 7.3 and 7.4, Net Profits shall be allocated among the Partners in proportion to their Percentage Interests.

Section 7.2 Allocation of Net Losses. After giving effect to special allocations, Net Losses shall be allocated in proportion to Percentage Interests; provided that no Net Loss shall be allocated to a Limited Partner to the extent it would cause or increase that Limited Partner's Adjusted Capital Account Deficit. Remaining Net Losses shall be allocated to the General Partner to the extent of the General Partner's enforceable deficit restoration obligation under Section 14.6, subject to the nonrecourse debt rules of Treasury Regulation § 1.704-2.

Section 7.3 Special Allocations. The following special allocations shall be made in the following order:

(a) Minimum Gain Chargeback. If there is a net decrease in Partnership Minimum Gain during any Fiscal Year, each Partner shall be allocated items of income and gain as required by Treasury Regulation § 1.704-2(f).

(b) Partner Nonrecourse Debt Minimum Gain Chargeback. If there is a net decrease in Partner Nonrecourse Debt Minimum Gain, each Partner who has a share of such Minimum Gain shall be allocated items of income and gain as required by Treasury Regulation § 1.704-2(i)(4).

(c) Qualified Income Offset. If any Partner unexpectedly receives an adjustment, allocation, or distribution described in Treasury Regulation §§ 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of income and gain, including a proportionate share of each item of income and gain, shall be allocated to that Partner in the amount and manner needed to eliminate that Partner's resulting Adjusted Capital Account Deficit as quickly as possible.

(d) Nonrecourse Deductions. Nonrecourse Deductions shall be allocated in proportion to Percentage Interests.

(e) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions shall be allocated to the Partner bearing the economic risk of loss for the related nonrecourse debt.

Section 7.4 Curative Allocations. The General Partner may make offsetting allocations so that the net allocations to each Partner approximate what would have been allocated absent the Regulatory Allocations.

Section 7.5 Tax Allocations. For income tax purposes, each item shall be allocated consistently with its correlative "book" item, except as required by Code § 704(c) and Treasury Regulation § 1.704-1(b)(4)(i). The General Partner shall determine the federal tax owner of an assigned interest separately from the assignee's admission status under Article IX and allocate tax items only to persons treated as partners for federal income tax purposes.

Section 7.6 Allocation Period. If a Percentage Interest changes during a Fiscal Year, allocations shall be made using any permissible method under Code § 706(d) as selected by the General Partner.

Section 7.7 Sharing of Profits and Losses Under the Act. Pursuant to S.C. Code Ann. § 33-42-830, the profits and losses of the Partnership shall be allocated among the Partners as provided in the partnership agreement. If this Agreement does not provide an allocation, profits and losses are allocated based on the value of contributions received by the Partnership and not returned, as recorded in Partnership records.

ARTICLE VIII — DISTRIBUTIONS

Section 8.1 Distributions of Distributable Cash. The General Partner shall determine the amount and timing of distributions. Distributions shall be made to Partners in proportion to their Percentage Interests unless otherwise provided.

Section 8.2 Frequency of Distributions. Distributions shall be made:

☐ Monthly, within [____] days after month-end.
☐ Quarterly, within [____] days after quarter-end.
☐ Annually, within [____] days after the close of each Fiscal Year.
☐ At such times as the General Partner determines in its reasonable discretion.

Section 8.3 Tax Distributions. Within ninety (90) days after the close of each Fiscal Year, the Partnership shall distribute to each Partner an amount sufficient to cover such Partner's estimated federal and state income tax liability attributable to the Partnership's taxable income for such year, calculated at the highest applicable marginal rate. Tax Distributions are advances against future distributions.

Section 8.4 Limitations on Distributions. Under S.C. Code Ann. § 33-42-1010, interim distributions follow the terms of this Agreement. Under § 33-42-1070, no Partner may receive a distribution to the extent that, after giving effect to it, Partnership liabilities other than liabilities to Partners on account of their partnership interests exceed the fair value of Partnership assets.

Section 8.5 Distributions in Kind. No Partner may demand in-kind distributions except with the General Partner's consent. In-kind distributions shall be valued at fair market value.

Section 8.6 Withholding. The Partnership may withhold amounts required by federal, state, or local tax law. Withheld amounts shall be treated as distributed to the applicable Partner.

Section 8.7 Interim Distributions. Subject to the limitations of this Article VIII, the General Partner may authorize interim distributions at any time, taking into account the Partnership's cash flow needs, working capital requirements, and anticipated expenses.

ARTICLE IX — TRANSFER OF PARTNERSHIP INTERESTS

Section 9.1 Nature of Partnership Interest. Pursuant to S.C. Code Ann. § 33-42-1210, a Partnership Interest is personal property.

Section 9.2 Restrictions on Transfer. No Partner may Transfer all or any portion of such Partner's Partnership Interest except in compliance with this Article IX and applicable law. Any purported Transfer in violation of this Article shall be void.

Section 9.3 Transfers by Limited Partners. Pursuant to S.C. Code Ann. § 33-42-1220, a Partnership Interest is assignable in whole or in part. However, a Limited Partner may Transfer all or any portion of such Interest only if:

(a) The transferring Limited Partner provides at least thirty (30) days' prior written notice to the General Partner;

(b) The General Partner consents in writing (consent not to be unreasonably withheld);

(c) The transferee executes a written instrument agreeing to be bound by this Agreement;

(d) The Transfer would not result in treatment as a publicly traded partnership under Code § 7704;

(e) The Transfer would not violate applicable securities laws;

(f) The Transfer would not result in a Partnership termination under applicable tax law; and

(g) The transferring Limited Partner pays all reasonable Partnership expenses for the Transfer.

Section 9.4 Rights of Assignee. Pursuant to S.C. Code Ann. § 33-42-1220, an assignment of a Partnership Interest does not dissolve the Partnership or entitle the assignee to become a Partner or exercise any rights of a Partner. An assignee is entitled only to receive, to the extent assigned, the distributions to which the assigning Partner would be entitled.

Section 9.5 Right of First Refusal. Before any Limited Partner may Transfer to a third party (other than a Permitted Transfer):

(a) The transferring Partner shall deliver an Offer Notice specifying the Interest, proposed transferee, and material terms;

(b) The Partnership shall have thirty (30) days to purchase all of the offered Interest;

(c) If the Partnership does not exercise its option, the remaining Partners shall have thirty (30) additional days to purchase pro rata; and

(d) If neither exercises, the Transfer may proceed within ninety (90) days on terms no more favorable to the transferee.

Section 9.6 Transfers by General Partner. The General Partner may not Transfer its Interest without prior written consent of a Majority in Interest of the Limited Partners.

Section 9.7 Permitted Transfers. The following Transfers are permitted without General Partner consent, subject to Sections 9.3(c) through (f):

(a) Transfers to a revocable trust for estate planning where the Partner is trustee;

(b) Transfers to a Partner's spouse, children, grandchildren, or siblings, or trusts for their benefit;

(c) Transfers by an entity Partner to an Affiliate; and

(d) Transfers by operation of law upon death or incapacity.

Section 9.8 Admission of Assignee as Substituted Partner. An assignee may become a substituted Limited Partner to the extent the assignor grants that right under authority in this Agreement or all other Partners consent, as provided in S.C. Code Ann. § 33-42-1240. Until admitted, the assignee has only the rights described in Section 9.4.

ARTICLE X — ADMISSION OF NEW PARTNERS

Section 10.1 Admission of New Limited Partners. Under S.C. Code Ann. § 33-42-410, a person becomes a Limited Partner on the later of the original Certificate filing date or the admission date stated in Partnership records. After filing, a person acquiring an interest directly from the Partnership may be admitted under this Agreement or, if it is silent, with written consent of all Partners. Under this Agreement, admitting such a person requires the General Partner's written consent.

Section 10.2 Admission of New General Partner. Pursuant to S.C. Code Ann. § 33-42-610, additional general partners may be admitted as provided in the partnership agreement or, if the agreement is silent, with the written consent of all Partners. Under this Agreement, admission of a new General Partner requires consent of a Majority in Interest of the Limited Partners.

Section 10.3 Conditions to Admission. Each new Partner shall:

(a) Execute this Agreement or an instrument of adherence;

(b) Make the required Capital Contribution;

(c) Provide requested representations and warranties; and

(d) Pay all expenses of the Partnership in connection with the admission.

Section 10.4 Amendment of Certificate. Upon admission of a new General Partner or upon any event requiring amendment, the General Partner shall file an amendment to the Certificate with the South Carolina Secretary of State in accordance with S.C. Code Ann. § 33-42-220.

ARTICLE XI — WITHDRAWAL AND DISSOCIATION

Section 11.1 Withdrawal of Limited Partner. Pursuant to S.C. Code Ann. § 33-42-1030, a limited partner may withdraw from the Partnership at the time or upon the happening of events specified in writing in the partnership agreement. For a Partnership formed on or after July 1, 1998, withdrawal is permitted only at the time or upon an event specified in writing in this Agreement. The six-month notice fallback in § 33-42-1030(B) applies only to certain earlier partnerships.

Under this Agreement, a Limited Partner may withdraw:

☐ Upon [____] days' prior written notice to the General Partner.
☐ Only upon the consent of the General Partner.
☐ Only upon dissolution of the Partnership.

Upon withdrawal, the withdrawing Limited Partner is entitled to receive any distribution to which such Partner is entitled under the Act and this Agreement. Pursuant to S.C. Code Ann. § 33-42-1040, the withdrawing Partner is entitled to receive the fair value of such Partner's interest as of the date of withdrawal, unless otherwise provided in this Agreement.

Section 11.2 Withdrawal of General Partner. Pursuant to S.C. Code Ann. § 33-42-1020, a General Partner may withdraw at any time by giving written notice to the other Partners. Withdrawal by the General Partner in contravention of this Agreement may give rise to liability to the Partnership and other Partners for damages resulting from the breach.

Under this Agreement, the General Partner may withdraw upon at least ninety (90) days' prior written notice to all Partners.

Section 11.3 Events of Withdrawal of General Partner. A General Partner ceases to be a general partner upon the occurrence of events set forth in S.C. Code Ann. § 33-42-620, including:

(a) Voluntary withdrawal;

(b) Removal as provided in the partnership agreement;

(c) Bankruptcy of the General Partner;

(d) Assignment for the benefit of creditors;

(e) A receivership or similar proceeding that meets the conditions and time periods in § 33-42-620;

(f) If a natural person, death or judicial determination of incompetency;

(g) If a corporate General Partner, filing of a certificate of dissolution or revocation of its charter; if a separate partnership, dissolution and commencement of winding up.

Section 11.4 Effect of Withdrawal of General Partner. Under S.C. Code Ann. § 33-42-1410(4), the Partnership may continue if another General Partner remains and the written provisions of this Agreement permit that Partner to carry on the business and that Partner does so. If none remains, all remaining Partners must agree in writing within ninety (90) days to continue the business and, under § 33-42-610, to admit any needed successor General Partner.

Section 11.5 Buyout Upon Withdrawal. A withdrawing Partner shall receive the fair market value of such Partner's Interest, determined as of the date of withdrawal, payable within [____] days or in [____] equal installments over [____] months.

ARTICLE XII — INDEMNIFICATION AND LIABILITY

Section 12.1 Indemnification. The Partnership shall indemnify, defend, and hold harmless the General Partner and its officers, directors, managers, members, employees, agents, and Affiliates (each, an "Indemnified Person") from all claims, demands, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of the management, operation, or business of the Partnership, to the fullest extent permitted by the Act; provided that no Indemnified Person shall be indemnified for:

(a) Fraud, willful misconduct, or gross negligence;

(b) Breach of fiduciary duty involving intentional misconduct or knowing violation of law; or

(c) Transactions from which the Indemnified Person derived an improper personal benefit.

Section 12.2 Advancement of Expenses. The Partnership shall advance reasonable expenses to Indemnified Persons upon receipt of an undertaking to repay if indemnification is ultimately not warranted.

Section 12.3 Limitation of Liability of General Partner. The General Partner shall not be liable to the Partnership or any Partner for Losses arising from good-faith acts or omissions, except for fraud, willful misconduct, gross negligence, or knowing violation of law.

Section 12.4 Limitation of Liability of Limited Partners. Under S.C. Code Ann. § 33-42-430, a Limited Partner is not personally liable for Partnership obligations solely by reason of being a Limited Partner, subject to that section's control and name-use rules. A Limited Partner remains bound by an enforceable written contribution promise under S.C. Code Ann. § 33-42-820.

Section 12.5 Insurance. The General Partner may obtain insurance on behalf of Indemnified Persons against any liability, whether or not the Partnership would have the power to indemnify.

ARTICLE XIII — TAX MATTERS

Section 13.1 Tax Classification. The Partners intend the Partnership to be classified as a partnership for federal income tax purposes. No election to be treated as a corporation shall be made without all Partners' written consent.

Section 13.2 Partnership Representative. The General Partner (or its designee) shall serve as the "partnership representative" under Code § 6223 with all attendant powers, including the authority to:

(a) Bind the Partnership and Partners in federal tax matters;

(b) Negotiate and settle with the IRS;

(c) Extend the statute of limitations;

(d) File administrative adjustment requests; and

(e) Make the push-out election under Code § 6226.

Section 13.3 Tax Returns. The General Partner shall prepare and timely file all required tax returns and furnish each Partner a Schedule K-1 within the time required by law. The Partnership shall file with the South Carolina Department of Revenue all required returns, including SC1065 (Partnership Return of Income) or any successor form.

Section 13.4 Tax Elections. The General Partner may make tax elections on behalf of the Partnership, including elections under Code §§ 754, 709, and 48; provided that a Section 754 election requires consent of a Majority in Interest of the Limited Partners.

Section 13.5 South Carolina Tax Matters. The Partnership is subject to South Carolina income tax withholding requirements for nonresident partners under S.C. Code Ann. § 12-8-590 and related provisions. The General Partner shall ensure compliance with all South Carolina tax withholding and reporting requirements, including the filing of SC1065 returns with the South Carolina Department of Revenue.

ARTICLE XIV — DISSOLUTION AND WINDING UP

Section 14.1 Events Causing Dissolution. Pursuant to S.C. Code Ann. § 33-42-1410, the Partnership shall be dissolved upon the earliest occurrence of:

(a) The time specified in the Certificate or an event specified in writing in this Agreement;

(b) Written consent of all Partners;

(c) Withdrawal of a General Partner unless the continuation conditions in Section 11.4 are met;

(d) Entry of a judicial decree of dissolution under S.C. Code Ann. § 33-42-1420.

Section 14.2 Winding Up. Upon dissolution, the General Partners who have not wrongfully dissolved the Partnership, or if none the Limited Partners, may wind up its affairs as provided in S.C. Code Ann. § 33-42-1430, subject to this Agreement and any court order. The person conducting the winding up (the "Liquidator") shall:

(a) Collect all debts owed to the Partnership;

(b) Liquidate Partnership assets in an orderly manner;

(c) Discharge or provide for all liabilities; and

(d) Distribute remaining assets in accordance with Section 14.3.

Section 14.3 Distribution of Assets. Pursuant to S.C. Code Ann. § 33-42-1440, upon winding up, 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 Partnership liabilities;

(b) Second, except as provided in the partnership agreement, to Partners and former Partners in satisfaction of distributions owed under S.C. Code Ann. §§ 33-42-1010 and 33-42-1040;

(c) Third, to Partners first for the return of their contributions, and then in proportion to their share of distributions as provided in the partnership agreement.

If this Agreement modifies the statutory distribution priorities, the remaining assets after payment of liabilities shall be distributed:

(i) First, to Partners in proportion to positive Capital Account balances after all final allocations; and

(ii) Second, to Partners in proportion to their Percentage Interests.

Section 14.4 Cancellation of Certificate. Upon dissolution and commencement of winding up, the General Partner or Liquidator shall file a Certificate of Cancellation with the South Carolina Secretary of State in accordance with S.C. Code Ann. § 33-42-230.

Section 14.5 Reasonable Time for Winding Up. A reasonable time shall be allowed for orderly winding up to minimize losses.

Section 14.6 Deficit Capital Account Balance. No Limited Partner shall be required to restore a deficit Capital Account upon liquidation of that Limited Partner's interest. Upon liquidation of a General Partner's interest, that General Partner shall unconditionally restore any deficit Capital Account balance, after all Capital Account adjustments for the taxable year, by the end of that taxable year or, if later, within ninety (90) days after liquidation of the interest. Upon liquidation of the Partnership, the restored amount shall be applied to Partnership creditors or distributed to Partners with positive Capital Account balances.

ARTICLE XV — BOOKS, RECORDS, AND ACCOUNTING

Section 15.1 Books and Records. The General Partner shall maintain the records required by S.C. Code Ann. § 33-42-60 at the South Carolina office maintained under § 33-42-50:

(a) A current list of each Partner's name, address, and Capital Contribution;

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

(c) This Agreement and all amendments;

(d) Federal, state, and local income tax returns for the three (3) most recent taxable years;

(e) Financial statements for the three (3) most recent Fiscal Years;

(f) All Capital Account records;

(g) Minutes of Partner meetings; and

(h) Written consents of Partners.

Section 15.2 Method of Accounting. Books and records shall be kept on the:

☐ Cash basis method of accounting
☐ Accrual basis method of accounting

as consistently applied.

Section 15.3 Financial Reports. The General Partner shall provide:

(a) Within ninety (90) days after each Fiscal Year, an annual report with balance sheet, income statement, statement of cash flows, and statement of changes in Partners' capital;

(b) Within forty-five (45) days after each calendar quarter, a quarterly financial report; and

(c) Such other reports as any Limited Partner may reasonably request.

Section 15.4 Audit. Financial statements shall be:

☐ Audited annually by an independent CPA firm.
☐ Reviewed annually by an independent CPA firm.
☐ Compiled annually by an independent CPA firm.
☐ Not subject to audit, review, or compilation requirements.

Section 15.5 Bank Accounts. Partnership funds shall be deposited in accounts at financial institutions selected by the General Partner.

ARTICLE XVI — DISPUTE RESOLUTION

Section 16.1 Negotiation. Partners shall first attempt good-faith negotiation. Any Partner may give written notice of a dispute, and the Partners shall meet within twenty (20) days.

Section 16.2 Mediation. If negotiation fails within thirty (30) days, any Partner may submit the dispute to mediation under AAA rules. Mediation shall be conducted in [________________________________], South Carolina. Costs shall be shared equally.

Section 16.3 Arbitration. If mediation fails within sixty (60) days, any Partner may submit the dispute to binding arbitration under AAA rules in [________________________________], South Carolina, before a single arbitrator (or three arbitrators if the amount in controversy exceeds $[________________________________]).

(a) South Carolina law shall apply.

(b) The decision shall be final, binding, and enforceable in any court, including the South Carolina Court of Common Pleas for [________________________________] County.

(c) The prevailing party shall recover reasonable attorneys' fees and costs.

Section 16.4 Provisional Remedies. Nothing herein prevents any Partner from seeking equitable or provisional remedies from any court of competent jurisdiction in South Carolina, including the Court of Common Pleas of [________________________________] County or the South Carolina Circuit Court.

ARTICLE XVII — AMENDMENTS

Section 17.1 Amendments Generally. This Agreement may be amended only by written instrument executed by the General Partner and a Majority in Interest of the Limited Partners.

Section 17.2 Amendments by General Partner. The General Partner may amend this Agreement without Limited Partner consent to:

(a) Reflect admission, substitution, or withdrawal of Partners;

(b) Reflect changes in Capital Contributions or Percentage Interests;

(c) Comply with the Act or applicable law;

(d) Cure ambiguities or inconsistencies; or

(e) Update Exhibit A.

Section 17.3 Unanimous Consent Required. The following amendments require unanimous written consent:

(a) Reduction of any Partner's Percentage Interest or distributions;

(b) Increase of any Partner's Capital Contribution obligation;

(c) Modification of this Section 17.3; or

(d) Any amendment adversely affecting limited liability protections.

ARTICLE XVIII — GENERAL PROVISIONS

Section 18.1 Governing Law. This Agreement shall be governed by the laws of the State of South Carolina, including the Uniform Limited Partnership Act, S.C. Code Ann. § 33-42-10 et seq., without regard to conflict of laws principles.

Section 18.2 Jurisdiction and Venue. Each Partner submits to the exclusive jurisdiction of the courts of South Carolina, including the Court of Common Pleas of [________________________________] County, and the United States District Court for the District of South Carolina.

Section 18.3 Notices. All notices shall be in writing and deemed given:

(a) Upon personal delivery;

(b) One (1) business day after overnight courier deposit;

(c) Three (3) business days after mailing by certified mail, return receipt requested; or

(d) Upon confirmed electronic mail (with follow-up by another method within two (2) business days).

Notices shall be addressed to Partners at the addresses on Exhibit A or as otherwise designated.

Section 18.4 Entire Agreement. This Agreement and all exhibits constitute the entire agreement among the Partners and supersede all prior agreements and understandings.

Section 18.5 Severability. If any provision is held invalid, the remaining provisions continue in full force. Invalid provisions shall be reformed to preserve the Partners' intent.

Section 18.6 Waiver. No waiver is effective unless written and signed. No delay in exercising rights constitutes a waiver.

Section 18.7 Binding Effect. This Agreement binds and inures to the benefit of Partners and their heirs, executors, administrators, successors, and permitted assigns.

Section 18.8 Counterparts. This Agreement may be executed in counterparts. Electronic signatures shall be deemed originals.

Section 18.9 Headings. Headings are for convenience and do not affect interpretation.

Section 18.10 Construction. This Agreement is construed as jointly drafted, with no presumption favoring any Partner.

Section 18.11 Confidentiality. Partners shall maintain the confidentiality of nonpublic Partnership information, except as required by law.

Section 18.12 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTNER IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT.

Section 18.13 Third-Party Beneficiaries. Except for Indemnified Persons, this Agreement confers no rights on any Person other than the Partners.

Section 18.14 Creditors. No provision of this Agreement benefits or is enforceable by any creditor.

Section 18.15 Further Assurances. Each Partner shall execute further documents as may be reasonably necessary.

ARTICLE XIX — SIGNATURE PAGE

IN WITNESS WHEREOF, the Partners have executed this Limited Partnership Agreement as of the Effective Date.

GENERAL PARTNER:

[________________________________]

By: [________________________________]
Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

Address:
[________________________________]
[________________________________], South Carolina [____]

LIMITED PARTNER(S):

[________________________________]

By: [________________________________]
Name: [________________________________]
Title: [________________________________] (if applicable)
Date: [__/__/____]

Address:
[________________________________]
[________________________________], South Carolina [____]

[________________________________]

By: [________________________________]
Name: [________________________________]
Title: [________________________________] (if applicable)
Date: [__/__/____]

Address:
[________________________________]
[________________________________], South Carolina [____]

[________________________________]

By: [________________________________]
Name: [________________________________]
Title: [________________________________] (if applicable)
Date: [__/__/____]

Address:
[________________________________]
[________________________________], South Carolina [____]

NOTARY ACKNOWLEDGMENT — STATE OF SOUTH CAROLINA

STATE OF SOUTH CAROLINA
COUNTY OF [________________________________]

On this [____] day of [________________________________], 20[____], before me, the undersigned notary public, personally appeared [________________________________], known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

Notary Public: [________________________________]
My Commission Expires: [__/__/____]

[NOTARIAL SEAL]

(Notary acknowledgment must comply with the South Carolina Notary Public Act, S.C. Code Ann. § 26-1-10 et seq.)

EXHIBIT A — PARTNER SCHEDULE AND CAPITAL CONTRIBUTIONS

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

EXHIBIT B — CERTIFICATE OF LIMITED PARTNERSHIP REFERENCE

The Certificate of Limited Partnership was filed (or is to be filed) with:

South Carolina Secretary of State
Business Filings Division
1205 Pendleton Street, Suite 525
Columbia, SC 29201

Filing Date: [__/__/____]
Entity Number: [________________________________]
Filing Fee: $10.00 under S.C. Code Ann. § 33-42-2040(a)

The Certificate of Limited Partnership contains the following information as required by S.C. Code Ann. § 33-42-210:

1. The name of the limited partnership: [________________________________], Limited Partnership
2. The address of the office and the name and address of the agent for service of process
3. The name and the business address of each general partner
4. The latest date upon which the limited partnership is to dissolve
5. Any other matters the general partners determine to include

EXHIBIT C — DESCRIPTION OF PARTNERSHIP BUSINESS

The Partnership has been formed for the purpose of engaging in the following business activities:

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

EXHIBIT D — FORM OF ASSIGNMENT OF PARTNERSHIP INTEREST

ASSIGNMENT OF LIMITED PARTNERSHIP INTEREST

FOR VALUE RECEIVED, the undersigned ("Assignor") hereby assigns, transfers, and conveys to [________________________________] ("Assignee") a [____]% Partnership Interest in [________________________________], Limited Partnership, a South Carolina limited partnership (the "Partnership"), subject to the terms of the Limited Partnership Agreement dated [__/__/____] (the "Agreement").

The Assignor represents and warrants:

1. The Assignor is the lawful owner of the Interest;
2. The Interest is free and clear of all liens, claims, and encumbrances;
3. This assignment complies with all transfer restrictions in the Agreement; and
4. All necessary consents have been obtained.

Pursuant to S.C. Code Ann. § 33-42-1220, the Assignee acknowledges that this assignment does not entitle the Assignee to become a substituted Partner unless admitted in accordance with Article X.

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

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

ACKNOWLEDGED AND CONSENTED TO BY GENERAL PARTNER:
Name: [________________________________]
Title: [________________________________]
Signature: [________________________________]
Date: [__/__/____]

SOURCES AND REFERENCES

• South Carolina Uniform Limited Partnership Act, S.C. Code Ann. Title 33, Chapter 42: www.scstatehouse.gov
• South Carolina Secretary of State, Business Filings Division: www.sos.sc.gov
• Certificate of Limited Partnership Form: SC Secretary of State Forms
• South Carolina Department of Revenue: dor.sc.gov
• Internal Revenue Code, 26 U.S.C. — Partnership Provisions
• South Carolina Notary Public Act, S.C. Code Ann. § 26-1-10 et seq.