THIS AGREEMENT OF PARTNERSHIP, effective as of 5 March 1996 by and between the undersigned, to wit:
(see members)
NOW, THEREFORE, IT IS AGREED:
1. FORMATION. The undersigned hereby form a partnership inaccordance with the laws of the state of California.
2. NAME. The name of the partnership shall be "High Seas Traders" and may be abbreviated "HST".
3. TERM. The partnership shall commence on the date these Articles are executed by the founding members and shall continue for a time not limited by these Articles and until dissolved as hereinafter provided.
4. PURPOSE. The purpose of the partnership is to educate the partners in the area of investing the assets of the partnership in stocks, bonds, securities and other investment vehicles as voted upon by the partnership, to increase the value of the portfolio each and every year and to foster in the partners along-term perspective in accumulation of assets.
5. MEETINGS. The members of the partnership shall conduct business, discussions, etc. via electronic mail (e-mail), and through other electronic means on the Internet. Each partner, or his proxy, is required to have an e-mail address and the ability to view HST's Worldwide Web (WWW) homepage.
6. CAPITAL CONTRIBUTIONS. The partners shall make investment capital contributions of a specified amount no less than $50.00 to the partnership's Credit Union account prior to the 20th of each month via electronic means (either Direct Deposit or electronic funds transfer). Each partner may also make contributions of unlimited value at a frequency no greater than once per fiscal quarter (during the first week of January, April, July and October).
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 11:59 PM on the last day of each month ("valuation time").
8. CAPITAL ACCOUNTS. Two capital accounts shall be maintained in the name of each partner; one administrative (managed by the Secretary), and one investment (managed by the Treasurer). Any increase or decrease in the value of the partnership at any valuation time shall be credited or debited, respectively, to each partner's investment capital account in proportion to the sum of all partner investment capital accounts on that date. Any other method of valuating each partner's investment capital account may be substituted for this method, provided the substituted method results in exactly the same valuation as previously provided herein. Each partner's investment capital contribution to, or investment capital withdrawal from, the partnership, shall be credited, or debited, respectively, to that partner's investment capital account.
9. MANAGEMENT. Each partner shall participate in the management and conduct of the affairs of the partnership. Except as otherwise determined, all decisions shall be made by the partners on the basis of each partner having one vote regardless of the amount of value of the partner's investment capital account.
10. SHARING OF PROFITS AND LOSSES. Net profits and losses of the partnership shall inure to, and be borne by, the partners in proportion to the value of each of their investment capital accounts.
11. BOOKS OF ACCOUNTS. Books of account of the transactions of the partnership shall be kept and at all times be available and open to inspection and examination by any partner. Monthly and annual reports will be posted on the Homepage.
12. ANNUAL ACCOUNTING. Each calendar year, a full and complete account of the condition of the partnership shall be made to the partners via posting on the Homepage and via hardcopy. The Treasurer will also be required to submit Form 1065 to the Internal Revenue Service (IRS) annually as required by law and provide a Schedule K-1 to each partner as required by law.
13. BANK ACCOUNT. The partnership may select a bank or credit union for the purpose of opening an account. Funds in that account shall be withdrawn by either checks or electronic transfers authorized by the following officers: President, Vice President, Treasurer and Secretary.
14. BROKER ACCOUNT. The partnership may select a broker and enter into such agreements with the broker as required or the purchase or sale of securities. Securities owned by the partnership shall be held in the partnership name or the "streetname" of the associated brokerage account.
Any corporation or transfer agent called upon to transfer any securities to or from the name of the partnership shall be entitled to rely in instructions or assignments signed by either the President, Vice President, Treasurer or Secretary without inquiry as to the authority of the person(s) signing such instructions or assignments, or as to 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 expenses.
16. ADDITIONAL PARTNERS. Additional partners may be admitted at any time, only if the additional partner is sponsored by an existing partner, so long as the number of partners does not exceed one-hundred (100). The sponsoring partner is responsible for initial training of any additional 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 a majority of all partners. Express 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 investment capital account, which shall be inaccordance 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 all partners. Express 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 unanimous consent of all partners. Express 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 or their personal representatives in proportion to each partner's investment capital account.
18. VOLUNTARY WITHDRAWAL (Partial or Full) of a Partner. Any partner may withdraw a part or all of the value of his/her investment capital account in the partnership and the partnership shall continue as a legal entity. The partner withdrawing a portion or all of the value of his/her investment capital account shall give notice of such intention via electronic means, or in writing, to the Secretary. Express notice shall be deemed to be received as of the first following valuation time.
The partnership shall pay the partner who is withdrawing a portion or all of the value of his/her investment capital account in the partnership in accordance with paragraph 20 of this Agreement.
19. DEATH OR INCAPACITY OF A PARTNER. In the event of the death 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, unless the surviving beneficiary of record chooses to assume the status of the dead or incapacitated partner.
20. TERMS OF PAYMENT. In the case of full or 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 either case, where securities are to be distributed, the remaining partners shall 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/her interest in the partnership, an amount equal to the lesser of: (1) ninety-seven percent (97%) of the value of the investment capital account in the partnership being withdrawn, or (2) the value of the investment capital account being withdrawn, less the actual cost to the partnership of selling securities to obtain cash to meet the withdrawal. The amount being withdrawn shall be paid within 30 days after the valuation time used indetermining the withdrawal amount.
If a partner withdrawing a portion or all of the value of his/her investment capital account in the partnership desires an immediate payment in cash, the partnership, at its earliest convenience, may pay eighty percent (80%) of the estimated valueof his/her investment capital account and settle the balance inaccordance with the valuation and payment procedures set forth in paragraphs 18 and 20.
When securities are transferred, the partnership shall select securities to transfer to the value of the investment capital account or a portion of the investment 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 investment capital account in the partnership. The Club's broker shall be advised that ownership of the securities has been transferred to the partner as of the valuation time 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 whatsoever with regard to any matter outside the scope of the partnership purpose.
(b) Except as provided in paragraph 16A, without 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 other partner whomsoever, or enter into any agreement as the result of which any persons not a partner shall become interested with him/her in the partnership.
(c) Purchase an investment for the partnership where less than the full purchase price is paid for same.
(d) Use the partnership name, credit or property for other than partnership purposes.
(e) Do any act detrimental to the interests of the partnership or which would make it impossible to carry on the purpose of the partnership.
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 executed on the dates indicated below, effective as of the date indicated above:
Name: ______________________
Signed: _____________________
Beneficiary: _________________
Dated: ______________________
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