PARTNERSHIP AGREEMENT

PARTNERSHIP AGREEMENT

This Partnership Agreement (“Agreement”) is made and entered into on this [Today’s Date], (the “Effective Date”), by and between:

[Your Name/Organization] [Your Address] [City, State, ZIP] Email Address: [Your Email Address] Phone Number: [Your Phone Number] referred to as “Party A,”

and

[Partner’s Name] [Partner’s Address] [City, State, ZIP] referred to as “Party B.”

Collectively, Party A and Party B shall be referred to as the “Partners.”

RECITALS:

WHEREAS, the Partners desire to form a partnership (the “Partnership”) to engage in the business activities described in this agreement; and

WHEREAS, the Partners wish to clarify their ownership interests, rights, and obligations in the Partnership.

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

FORMATION OF PARTNERSHIP:
- The Partners hereby agree to form a general partnership (the “Partnership”) under the laws of the California to conduct the business described hereinbelow;
  - [Animation Studio]
- The Partnership shall be effective as of the Effective Date.
NAME OF THE PARTNERSHIP:
- The Partnership shall be known as “Lights Out Animation LCC”.
OWNERSHIP STRUCTURE:
- The Parties shall own the Partnership in the following proportion:
  - Party A: 60%
  - Party B: 40%
- The ownership interests may be adjusted in the future by mutual written agreement of the Parties.
CAPITAL CONTRIBUTIONS:
- Each Partner shall make an initial capital contribution to the Partnership based on their ownership percentage as mentioned in Section 3.
- The initial capital contributions and any subsequent capital injections shall be detailed in Exhibit B attached hereto.
- All capital contributions shall be used exclusively for the purposes of the Partnership’s business as outlined in this Agreement.
MANAGEMENT AND DECISION-MAKING:
- The Partners shall jointly manage the affairs of the Partnership. Partner A shall have full financial control, including authority over financial matters, access to the company bank accounts, and any other aspects related to the finance side of the business. Each Partner, regardless of their ownership percentage, shall have an equal say in the overall management and decision-making process.
- Management Roles and Responsibilities:
  - Eduardo shall be responsible for the following areas:
    - Art direction
    - Production
  - Zac shall be responsible for the following areas:
    - Writing
    - Story and Production
  - Major decisions, including the admission of new partners or the sale of substantial assets, shall require the unanimous consent of both Partners.
  - Day-to-day operational decisions may be made independently by each Partner within their designated areas of responsibility, as outlined in section 5.2, provided they are consistent with the overall objectives and financial goals of the Partnership.

PROFITS AND LOSSES:
- The net profits and losses of the Partnership shall be distributed among the Partners in proportion to their ownership interests, as mentioned in Section 3.
- Profits and losses shall be calculated annually at the end of each fiscal year or as otherwise agreed upon by the Partners.
BOOKS AND RECORDS:
- The Partnership shall maintain accurate and up-to-date financial records, including but not limited to, income statements, balance sheets, and cash flow statements. These records shall be made available for inspection by both Partners during regular business hours.
- The Partners shall meet regularly to review the financial performance of the Partnership and discuss any other matters concerning its operation.
DEATH OR INCAPACITY
- Death of a Partner:
  - In the event of the death of a Partner, the Partnership shall not automatically dissolve. Instead, the surviving Partner shall have the option to purchase the deceased Partner’s interest in the Partnership from their estate.
  - The value of the deceased Partner’s interest shall be determined based on their initial investment in the Partnership, as specified in Exhibit B of this Agreement.
  - The purchase price for the deceased Partner’s interest shall be paid to their estate within [number] days of their death.
  - Upon the completion of the buyout, the deceased Partner’s interest shall be transferred to the surviving Partner, and the estate of the deceased Partner shall have no further claims or rights in the Partnership.
- Incapacity of a Partner:
  - If a Partner becomes incapacitated due to a mental or physical illness that renders them unable to make decisions, the other Partner(s) shall have the option to buy out their interest in the Partnership.
  - The value of the incapacitated Partner’s interest shall be determined based on their initial investment in the Partnership, as specified in Exhibit B of this Agreement.
  - The buyout option shall become available if the incapacity of the Partner continues for a period of [number] consecutive months, as certified by a licensed medical professional.
  - The purchase price for the incapacitated Partner’s interest shall be paid to them or their legal representative within [number] days of the decision to exercise the buyout option.
  - Upon the completion of the buyout, the incapacitated Partner’s interest shall be transferred to the remaining Partner(s), and the incapacitated Partner or their legal representative shall have no further claims or rights in the Partnership.
- Right of First Refusal:
  - In the event of the death or incapacity of a Partner, the remaining Partner(s) shall have the right of first refusal to purchase the deceased or incapacitated Partner’s interest before any offer is made to a third party.
  - The right of first refusal shall be exercised within [number] days of receiving a written offer from a third party to purchase the interest.
  - If the remaining Partner(s) choose not to exercise their right of first refusal, the deceased or incapacitated Partner’s interest may be sold to the third party on the same terms as offered, subject to the provisions of this Agreement.

TERM AND TERMINATION:
- This Agreement shall remain in effect until terminated by mutual agreement of the Partners or upon completion of the objectives set forth in this Agreement.
  - Termination by Mutual Agreement:
    - If both Parties mutually agree to terminate the Partnership before the completion of the objectives set forth in this Agreement, a termination plan shall be devised and executed.
    - The termination plan shall take into consideration the differing contributions of the Partners in terms of capital and time and skills.
    - The Partners shall discuss and agree on a fair and equitable distribution of the Partnership’s assets, considering the financial and non-financial contributions made by each Partner.
  - Completion of Business Objectives:
    - If the objectives set forth in the Agreement are completed and the Partnership has achieved its goals, the Partners may decide to dissolve the Partnership.
    - In the event of dissolution, the Partners shall discuss and agree on a fair distribution of the remaining funds or assets.
    - The distribution shall consider both the financial investments and the non-financial contributions made by each Partner during the course of the Partnership.
  - Buyout Option:
    - In the event that Party A wishes to terminate the Partnership before the completion of the objectives set forth in this Agreement, Party B shall have the option to buy out Party A’s interest in the Partnership.
    - The value of Party A’s interest shall be determined based on their initial capital investment, as specified in Exhibit B, and any agreed-upon method to value Party B’s non-financial contributions.
    - If Party B decides to exercise the buyout option, the purchase price for Party A’s interest shall be paid to Party A within [number] days of the decision to buy out.
    - Upon the completion of the buyout, Party A’s interest shall be transferred to Party B, and Party A shall have no further claims or rights in the Partnership.
  - Continuation of Partnership:
    - If both Parties agree to continue the Partnership despite any differences in financial and non-financial contributions, the Partnership shall remain in effect according to the terms of this Agreement.

EXIT STRATEGY
- Exit of a Partner:
  - If a Partner decides to leave the Partnership voluntarily or due to any other reason, the remaining Partner(s) shall have the first option to purchase the exiting Partner’s interest in the Partnership.
  - The value of the exiting Partner’s interest shall be determined based on their initial capital investment in the Partnership, as specified in Exhibit B of this Agreement.
  - The purchase price for the exiting Partner’s interest shall be paid to them within [number] days of the decision to exercise the buyout option.
  - Upon the completion of the buyout, the exiting Partner’s interest shall be transferred to the remaining Partner(s), and the exiting Partner shall have no further claims or rights in the Partnership.
- Valuation Method:
  - The value of the Partnership and the interest of a Partner shall be determined based on the Partner’s initial capital investment as recorded in Exhibit B. In the event of an exit, the valuation shall not consider any appreciation or depreciation of the Partnership’s assets beyond the initial capital contributions.
  - If the remaining Partner(s) decide not to exercise their option to buy out the exiting Partner, both parties shall agree to obtain a third-party appraisal to determine the fair market value of the exiting Partner’s interest.
  - The third-party appraisal shall be conducted by a professional appraiser agreed upon by both Parties, and the cost of the appraisal shall be shared equally between the exiting Partner and the remaining Partner(s).
- Distribution of Exiting Partner’s Interest:
  - Upon completion of the buyout or valuation process, the exiting Partner’s interest shall be transferred to the remaining Partner(s).
  - The exiting Partner shall be entitled to receive their share of the net profits or losses of the Partnership up to the date of their exit.
  - The remaining Partner(s) shall assume full control of the Partnership’s assets, operations, and decision-making following the exit of the Partner.
- Distribution of Exiting Partner’s Interest:
  - In the event of the exit of a Partner, regardless of their capital contribution, the ownership sharing of the remaining Partners shall still be in accordance with the percentages specified in Section 3.1 (Party A: 60%, Party B: 40%).
  - Upon the exit of a Partner, the remaining Partner(s) shall have the right to liquidate the Partnership’s assets. The Partnership’s assets may be liquidated to ensure a fair distribution of the exiting Partner’s interest while maintaining the ownership percentages of the remaining Partners.
  - The liquidation process shall be conducted in a transparent and equitable manner, with the aim of maximizing the value of the assets for the benefit of all Partners.
  - Following the liquidation, the proceeds shall be used to calculate the value of the exiting Partner’s interest based on their initial capital investment and any other agreed-upon valuation methods.
  - Upon completion of the liquidation and valuation process, the exiting Partner’s interest shall be transferred to the remaining Partner(s), and the exiting Partner shall have no further claims or rights in the Partnership.

AMENDMENTS
- This Agreement may be amended or modified at any time by the mutual written agreement of the Partners. Any such amendment or modification shall be executed in writing and shall be attached as an addendum to this Agreement.
- The Partners understand and acknowledge that circumstances, business needs, or other factors may change over time, and therefore, they agree to engage in good-faith discussions regarding any proposed amendments.
- In the event that an amendment is proposed, the Partners shall schedule a meeting to discuss the proposed changes. Both Parties shall have an equal say in the amendment process, and decisions shall be made by unanimous agreement.
- Any amendments made to this Agreement shall only be valid and enforceable if they are in writing and signed by both Partners.
- No oral agreements or understandings between the Partners shall have the effect of modifying or amending any provision of this Agreement.
CONFIDENTIALITY:
- The Partners shall keep all business-related information, trade secrets, and confidential data of the Partnership confidential during the partnership and after its termination.
DISPUTE RESOLUTION:
- In the event of any dispute arising out of or relating to this Agreement, the Partners shall first attempt to resolve the dispute through good-faith negotiations.
- If the dispute cannot be resolved through negotiations, the Partners agree to pursue mediation or arbitration in accordance with the rules of [Arbitration/Mediation Organization], located in [City, State].
GOVERNING LAW AND JURISDICTION:
- This Agreement shall be governed by and construed in accordance with the laws of Orange County, California, without regard to its conflict of laws principles.
- Any legal action or proceeding arising out of or relating to this Agreement shall be brought exclusively in the courts of Orange County, California, and the Parties hereby submit to the personal jurisdiction of such courts.

IN WITNESS WHEREOF, the Parties hereto have executed this Partnership Agreement as of the date first above written:

/s/___________________________

[Partner A]

[Date]

/s/___________________________

[Partner B]

[Date]

Witness

[City, State, ZIP]

[Notary Seal] (If required)

EXHIBIT B: CAPITAL CONTRIBUTIONS

The initial capital contributions of each Partner and any subsequent capital injections shall be as follows:

Party A’s Capital Contribution:

Cash: [Amount]
Assets: [Description of Assets and Estimated Value]
Total: [Total Value]

Party B’s Capital Contribution:

Cash: [Amount]
Assets: [Description of Assets and Estimated Value]
Total: [Total Value]

Subsequent Capital Injections:

[Outline any agreements regarding additional capital contributions by the Partners and the conditions under which they may be required.]

Capital Account:

The Partnership shall maintain separate capital accounts for each Partner, tracking their respective contributions and any share of profits or losses.

Interest on Capital:

The Partners shall not be entitled to any interest on their capital contributions.

Withdrawal of Capital:

No Partner shall be allowed to withdraw their capital contribution, in whole or in part, without the unanimous consent of the other Partner.

IN WITNESS WHEREOF, the Parties hereto have executed this Exhibit B as of the date first above written:

/s/___________________________

[Partner A]

[Date]

/s/___________________________

[Partner B]

[Date]

Witness

[City, State, ZIP]

[Notary Seal] (If required)

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