Partnership Agreement
of the Mutual Investment Club of Detroit This AGREEMENT of PARTNERSHIP,
effective as of ______________(date) by and between the undersigned,
to wit: (names of partners)
NOW, THEREFORE IT
IS AGREED:
1. Formation. The
undersigned hereby form a General Partnership in accordance with and
subject to the laws of the State of Michigan.
2. Name. The name
of the partnership shall be Mutual Investment Club of Detroit.
3. Term. The partnership
shall begin on ______________(date) and shall continue until December
31 of the same year and thereafter from year to year unless earlier
terminated as hereinafter provided.
4. Purpose. The
only purpose of the partnership is to invest the assets of the partnership
solely in stocks, bonds and other securities ("securities")
for the education and benefit of the partners.
5. Meetings. Periodic
meetings shall be held as determined by the partnership.
6. Capital Contributions.
The partners may 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%) of the capital accounts of all 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 the "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 Club.
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 on that date. Any other method of valuating each partner's 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 contribution to, or 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 his 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 by, thepartners, in proportion to the value of each of
their capital accounts.
11. Books of Account.
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.
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 any partner designated by the partnership.
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 or sale of securities. Securities
owned by the partnership shall be registered 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 any partner 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 has received written notice to the
contrary.
15. No Compensation.
No partner shall be compensated for services rendered to the partnership,
except reimbursementfor expenses.
16. Additional Partners.
Additional partners may be admitted at any time, upon the unanimous
consent of the partners, so long as the number of partners does not
exceed twenty-five (25).
16A. Transfers
to a Trust. A partner may, after giving written notice to the other
partners, transfer his interest in the partnership to a revocable
living trust of which he 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 a 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's 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 or 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 and the partnership
shall continue as a taxable entity. The partner withdrawing a part 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.
If written notice is received between meetings it will be treated as
received at the first following meeting. In making payment, the value
of the partnership as set forth in the valuation statement prepared
for the first meeting following the meeting at which notice is received
from a partner requesting a partial or full withdrawal, will be used
to determine the value of the partner's account. The partnership shall
pay the partner who is withdrawing a portion or all of the value of
his 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 partner pursuant to Paragraph 16A hereof),
receipt of notice shall be treated as a notice of full withdrawal.
20. 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 option
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 percent
(97%) of the value of the capital account 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.
The amount being withdrawn shall be paid within 10 days after the valuation
date used in determining the withdrawal amount. If the 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 percent (80%) 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. Where securities
are transferred, the partnership shall select securities to transfer
equal 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 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 whatsoever with regard to any matter outside
the scope of the partnership purpose. (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 interest in the
partnership to any other partner or other person whomsoever, or enter
into any agreement as the result of which any person or persons not
a partner shall become interested with him 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 business or affairs of the partnership.
This Agreement of
Partnership shall be binding upon the respective heirs, executors, administrators
and personal representatives of the partners. The partners have caused
this Agreement of Partnership to be executed on the dates indicated
below, effective as of the date indicated above. Partners: (Signatures
of partners)
