Example Operating Procedures
THIS
AGREEMENT OF PARTNERSHIP, effective as of
November 8, 2001, by and between the undersigned, to with:
[List of Undersigned]
1. Formation. The undersigned hereby form a General Partnership in accordance
with and subject to the laws of the State of VALUE.
2. Name.
The name of the partnership shall be Example of An Investment Club
of VALUE.
3. Term. The partnership shall begin on November 8,
2001, and shall continue from year to year unless earlier terminated as
hereinafter provided.
4. Purpose. The partnership purpose is to consolidate
the resources of a particular group of individuals and invest these resources
in different instruments that will support the partnership in its goals.
5. Meetings. Periodic meetings shall be held as
determined by the partnership.
6. Capital Contributions. The partners will make capital contributions
to the partnership on the date of each periodic meeting in such amounts as the
partnership shall determine, provided; however, that no partner's capital
account shall exceed twenty percent (20 percent) of the capital accounts of all
the partners.
7. Value of the Partnership. The current value of the assets of the
partnership, less the current value of the liabilities of the partnership
(hereinafter referred to as "value of the partnership") shall be
determined as of a regularly scheduled date and time ("valuation
date") preceding the date of each periodic meeting determined by the TEIC.
8. Capital Accounts. A capital account shall be maintained in the
name of each partner. Any increase or
decrease in the value of the partnership on any valuation date shall be credited
or debited, respectively, to each partner's capital account in proportion to
the sum of all partner capital accounts on that date. Any other method of valuing each partner's capital withdrawal
from the partnership, shall be credited, or debited, respectively to that
partner's capital account.
9. Management. Each partner shall participate in the
management and conduct of the affairs of the partnership in proportion to the
value of his/her capital account.
Except as otherwise determined, all decisions shall be made by the
partners whose capital accounts total a majority of the value of the capital
accounts of all the partners.
10. Sharing of Profits and Losses. Net
profits and losses of the partnership shall inure to, and be borne accountable
by, the partners in proportion to the value of each of their capital accounts.
11. Books of Accounts. (a) Books of account for the transactions of the
partnership shall be kept and at all times be available and open to inspection
and examination by any partner.
(b) TEIC will be bonded.
12. Annual Accounting. Each
calendar year, a full and complete account of the condition of the partnership
shall be made to the partners.
13. Bank Account. The
partnership may select a bank for the purpose of opening a bank account. Funds in the bank account shall be withdrawn
by checks signed by one of the three designated partners.
14. Broker Account. None of the partners of this partnership
shall be a broker. However, the
partnership may select a broker and enter into such agreements with the broker
as required for the purchase of sale of securities. Securities owned by the partnership shall be held in the
partnership name unless another name shall be designated by the partnership.
Any corporation or transfer agent called upon to transfer any
securities to or from the name of the partnership shall be entitled to rely on
instructions or assignments signed by designated partner with inquiry as the
authority of the person(s) signing such instructions or assignments, or as the
validity of any transfer to or from the name of the partnership.
At the time of a transfer of securities, the corporation or
transfer agent is entitled to assume (1) that the partnership is still in
existence, and (2) that this Agreement is in full force and effect and has not
been amended unless the corporation or transfer agent has received written
notice to the contrary.
15. No Compensation. NO partner shall be compensated for services
rendered to the partnership, except reimbursement for approved expenses.
16. Additional Partners. Additional partners may be admitted at any
time, upon the unanimous consent of all the partners.
16A. Transfers to a Trust. A
partner may, after giving written notice to the other partners, transfer
his/her interest in the partnership to a revocable living trust of which he/she
is the grantor and sole trustee.
16B. Removal of a Partner. Any
partner may be removed by agreement of the partners whose capital accounts
total a majority of the value of all partners' capital accounts. Written notice of a meeting where removal of
a partner is to be considered shall include a specific reference to this
matter. The removal shall become
effective upon payment of the value of the removed partner's capital account,
which shall be in accordance with the provisions on full withdrawal of a
partner noted in paragraphs 18 and 20.
The vote action shall be treated as receipt of request for withdrawal.
17. Termination of Partnership. The partnership may be terminated by
agreement of the partners whose capital accounts total a majority in value of
the capital accounts of all the partners.
Written notice of the meeting where termination of the partnership is to
be considered shall include a specific reference to this matter. The partnership shall terminate upon a
majority vote of all partners capital accounts. Written notice of the decision to terminate the partnership shall
be given to all the partners. Payment
shall then be made of all the liabilities of the partnership and a final
distribution of the remaining assets either in cash or in kind, shall promptly
be made to the partners of their personal representatives in proportion to each
partner's capital account.
18. Voluntary Withdrawal. (Partial or Full) of a Partner. Any partner may withdraw a part or all of
the value of his capital account in the partnership. The partner withdrawing a portion or all of the value of his
capital account shall give notice of such intention in writing to the
Secretary. Written notice shall be
deemed to be received as of the first meeting of the partnership at which it is
presented. In making payment, the value
of the partnership as set forth in the valuation statement shall be prepared
for the first meeting following the meeting at which written notice is received
from a partner's capital account.
19. Death, Hardship, or
Incapacity of a Partner. In the
event of the death, hardship, or incapacity of a partner (or the death or
incapacity of the grantor and sole trustee of a revocable living trust, if such
trust is a partner pursuant to Paragraph 16A hereof), receipt of notice of such
an event shall be treated as notice of full withdrawal. Payment shall be paid to the beneficiary or
how so ever instructed.
20. Terms of Payment. At anytime a withdrawal (partial or
full) is made by a partner from his/her capital account that has not existed
for at least 2 years (except in the case of death, hardship, or incapacity),
thirty five (35) percent of the partner's capital account will be transferred
in equal portions to the remaining partners capital accounts. This transaction will be performed prior to
any other terms of payment.
In the case of a partial withdrawal, payment may be
made in cash or securities of the partnership or a mix of each at the option of
the partner making the partial withdrawal.
In the case of a full withdrawal, payment may be made in cash or
securities or a mix of each at the options of the remaining partners. In either case, where securities are to be
distributed the remaining partners select the securities.
Where cash is transferred, the partnership shall transfer to
the partner or other appropriate entity withdrawing a portion or all of his
interest in the partnership, an amount equal to the lesser of (i) ninety seven (97) percent of the value of
the capital account in the partnership being withdrawn or (ii) the value of the capital account being
withdrawn, less the actual cost to the partnership of selling securities to
obtain cash to meet the withdrawal. Fifty
(50) percent of the amount being withdrawn shall be paid within ten (10) days
after the valuation date used in determining the withdrawal amount. The remaining balance will be paid in
installments over the proceeding five (5) months and will be based on the
valuation date used in determining the withdrawal amount.
If a partner withdrawing a portion or all of the value of his
capital account in the partnership desires an immediate payment in cash, the
partnership at its earliest convenience may pay eighty (80) percent of the
estimated value of his capital account and settle the balance in accordance
with the valuation and payment procedures set forth in paragraphs 18 and 20.
When securities are transferred, the partnership shall select
securities to transfer equal amounts to the value of the capital account or a
portion of the capital account being withdrawn (i.e. without a reduction for
broker commissions). Securities shall
be transferred as of the date of the club's valuation statement prepared to
determine the value of that partner's capital account in the partnership. The Club's Treasury Broker shall be advised
that ownership of the securities has been transferred to the partner as of the
valuation date used for the withdrawal.
21. Forbidden Acts. No partner shall: (a) Have the right or
authority to bind or obligate the partnership to any extent without majority
consent. (b) Except as provided in paragraph 16A, without the unanimous
consent of all the other partners, assign, transfer, pledge, mortgage or sell
all or part of his/her interest in the partnership to any person or
persons. (c) Use the partnership name, credit or property for other than
partnership purpose. (d) Do any act detrimental to the interests of
the partnership or which would make it impossible to carry on the purpose of
the partnership. (e) Purchase an investment for the partnership
where less than the full purchase price is paid (i.e. with an intent to make a
profit for some investment).
22. Clarifications.
Agreement language and processes that are identified by one fifth of the
partners as requiring further definition and clarification will be documented
in the club bylaws document. When
applying the (terms of payment) paragraph, prior to distribution of any
payments a vote on items requiring further definition and/or clarification will
be held and the decision agreed upon by a majority vote of the partners will be
documented in the bylaws document and serve as the governing law.
This Agreement of Partnership shall be binding upon the
respective heirs, executors, trustees, administrators and personal
representatives of the partners.
The partners have caused the Agreement of Partnership to be
effective on the date indicated in paragraph number 3.
_________________________ _________________________
President
Vice President
_________________________ _________________________
Treasurer
Assistant Treasurer
_________________________ _________________________
Secretary
Assistant Secretary
_________________________ _________________________
Historian
Parliamentarian / Sergeant of
Arms
