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Partnership Buyout Agreement template
Partnership Buyout Agreement sample


What is Partnership Buyout Agreement?

Partnership Buyout Agreement A Partnership Buyout Agreement details the buyout of a partner's interest in a partnership, specifying the buyout terms, valuation methods, and payment arrangements.



Sample template:



Partnership Buyout Agreement between Pioneer Equity Partners


1. Preliminary Statement

This Partnership Buyout Agreement (hereinafter, the "Buyout Agreement") is entered into and effective as of [Date], by and among the partners of Pioneer Equity Partners (hereinafter, the "Partnership") and [Name of Selling Partner] (hereinafter, the "Selling Partner"). The parties mutually agree to the terms and conditions outlined herein for the purpose of effectuating the buyout of the Selling Partner's interest in the Partnership.



2. Purpose of the Buyout

The purpose of this Buyout Agreement is to provide the terms and conditions under which the Selling Partner's ownership interest in the Partnership shall be purchased by the remaining partners or the Partnership. It is the intent of this Buyout Agreement that the terms and conditions herein shall be legally binding and enforceable in accordance with the laws of the United States of America.



3. Buyout Terms

3.1. Ownership Interest to be Purchased


The Selling Partner hereby agrees to sell, assign, transfer, and convey his/her entire interest, including all rights, title, and interest in the Partnership, amounting to [Percentage]%, to the remaining partners or the Partnership.



3.2. Purchase Price


The purchase price for the Selling Partner's interest in the Partnership (hereinafter, the "Purchase Price") shall be determined in accordance with Section 4 (Valuation Method) of this Buyout Agreement.



3.3. Payment Arrangements


The Purchase Price shall be paid by the remaining partners or the Partnership according to Section 5 (Payment Terms) of this Buyout Agreement.



3.4. Execution Dates


The closing date of the transactions contemplated by this Buyout Agreement (hereinafter, the "Closing") shall occur on [Closing Date] or as otherwise mutually agreed by the parties in writing.



4. Valuation Method

4.1. Partnership Asset-Based Approach


The Purchase Price shall be determined by the Partnership's asset-based approach, which shall include a consideration of the fair market value of the Partnership's assets and liabilities at the time of the valuation. The fair market value of the Partnership's assets and liabilities shall be determined by an independent certified public accountant or valuator, mutually agreed upon by the parties.



4.2. Valuation Date


The valuation of the Partnership's assets and liabilities shall be conducted as of a date not more than [Number of Days] days prior to the Closing (hereinafter, the "Valuation Date"). The Valuation Date may be adjusted upon the mutual written agreement of the parties.



5. Payment Terms

5.1. Initial Payment


A payment of [Initial Payment Percentage]% of the total Purchase Price shall be made on the Closing date, payable to the Selling Partner by the remaining partners or the Partnership (hereinafter, the "Initial Payment").



5.2. Installment Payments


The remaining balance of the Purchase Price, after the Initial Payment, shall be paid in [Number of Installments] equal installment payments (hereinafter, the "Installments") on the [Day of Month] of each month, commencing on the [First Installment Month] and ending on the [Final Installment Month]. Each Installment shall include applicable interest at the rate of [Interest Rate]% per annum.



6. Exit Provisions

6.1. Resignation and Release


Upon the receipt of the Initial Payment, the Selling Partner hereby resigns from the Partnership and releases the Partnership, its remaining partners, and their respective successors and assigns from any claims, demands, causes of action, and liabilities arising out of or related to the Partnership.



6.2. Non-Compete


The Selling Partner hereby agrees not to directly or indirectly compete with the Partnership or engage in any business that is in direct competition with the Partnership for a period of [Length of Non-Compete] from the Closing, within a [Geographic Area] radius.



6.3. Non-Solicitation


The Selling Partner hereby agrees not to directly or indirectly solicit, induce, or attempt to induce any customers, clients, vendors, employees, or agents of the Partnership to terminate their relationship with or reduce their services to the Partnership for a period of [Length of Non-Solicitation] from the Closing.



7. Governing Law

This Buyout Agreement shall be governed by and construed in accordance with the laws of the United States of America and the applicable state law in which the Partnership operates.



8. Entire Agreement

This Buyout Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, representations, and understandings, whether oral or in writing. The parties may amend, modify or waive any of the terms and conditions herein only by a written instrument executed by all parties hereto.



9. Execution in Counterparts

This Buyout Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.



By executing this Buyout Agreement, the parties hereby represent and warrant that they have read, understand, and agree to be bound by the terms and conditions contained herein.

[Name of Selling Partner]
______________________________________
Signature
[Typed or Printed Name]
[Date]

For Pioneer Equity Partners:

[Name of Authorized Representative]
______________________________________
Signature
[Typed or Printed Name, Title]
[Date]

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Sections of a Partnership Buyout Agreement


In this Partnership Buyout Agreement, you will see the following sections:

  1. Preliminary Statement
  2. Purpose of the Buyout
  3. Buyout Terms
  4. Valuation Method
  5. Payment Terms
  6. Exit Provisions
  7. Governing Law
  8. Entire Agreement
  9. Execution in Counterparts


Going indepth - Analysis of each section:

  1. Preliminary Statement : This section introduces the agreement, the parties involved, and the effective date. It's like the opening scene of a movie, setting the stage for the rest of the agreement.

  2. Purpose of the Buyout : This section explains the reason for the agreement, which is to outline the terms and conditions for buying out the Selling Partner's ownership interest in the Partnership. Think of it as the mission statement for the agreement.

  3. Buyout Terms : This section details the specifics of the buyout, such as the percentage of ownership interest being sold, the purchase price, payment arrangements, and the closing date. It's like a recipe, listing all the ingredients needed for the buyout to take place.

  4. Valuation Method : This section describes how the purchase price will be determined, using an asset-based approach and an independent certified public accountant or valuator. It also sets the valuation date. This is like the rulebook for calculating the price of the Selling Partner's ownership interest.

  5. Payment Terms : This section outlines how the purchase price will be paid, including the initial payment and any installment payments, along with applicable interest rates. It's like a payment plan, breaking down the total cost into manageable chunks.

  6. Exit Provisions : This section covers what happens after the buyout, such as the Selling Partner's resignation, release of claims, and non-compete and non-solicitation agreements. It's like the closing chapter of a book, tying up loose ends and setting the stage for the future.

  7. Governing Law : This section states that the agreement will be governed by the laws of the United States and the specific state where the Partnership operates. It's like the referee in a sports game, ensuring that everyone plays by the rules.

  8. Entire Agreement : This section clarifies that this agreement is the complete and final agreement between the parties, superseding any previous agreements or understandings. It's like a disclaimer, making sure everyone knows that this is the final word on the matter.

  9. Execution in Counterparts : This section allows the agreement to be signed in multiple copies, each considered an original. It's like a group photo, where each person gets their own copy to keep.

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