Coast to Coast On-Line Investment Club
AGREEMENT OF PARTNERSHIP
THIS AGREEMENT OF PARTNERSHIP, made as of March 24, 1998, and restated and amended as of April 1, 1999, by and between the undersigned, to wit:
The Names of Partners are set forth below in the signature page(s) to this Agreement and in any duly adopted Amendment hereto (the "Partners" or "Members");
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 Kansas.
2. Name: The name of the Partnership shall be the Coast to Coast On-Line Investment Club and shall be referred to hereinafter as the "Club" or by its initials "CTCOLIC."
3. Term: The Club shall begin on the date this Agreement is executed by the founding Partners and continue until December 31 of that same year and thereafter from year to year unless earlier terminated as provided herein.
4. Purpose: The purpose of the Club is to evaluate investments for the education of the Partners, to invest the assets of the Club solely in stocks, bonds, and other securities as determined by the Partners, and to foster in the Partners a long-term perspective in accumulation of assets in accordance with investment principles of the National Association of Investors Corporations (NAIC) and investment guidelines adopted by the Club.
5. Meetings/Communication: As an on-line organization, the Club shall conduct its business mainly via electronic communications, including e-mail ("e-mail"), Internet Relay Chat ("IRC"), and by other electronic means on the Internet (collectively, "electronic communications"), and by any other means approved by the club. Each Partner, or his proxy, shall be required to have access to computer hardware and software sufficient to participate fully in the affairs of the Club as determined by the Partners.
6. Capital Contributions: The Partners shall make periodic capital contributions to the Club in an amount decided by a majority vote of the Partners. Any contributions received by the specified deadline will be treated as if made on the deadline for purposes of determining each Partner's interest in the Club. Any contribution that is not received by the specified deadline shall be considered late and shall be posted to the said Partner's capital account on the date of the following contribution deadline. Any Partner who is in arrears for two consecutive deadlines may be considered for removal as per Article 16B.
6A. Limit on Capital Contributions: No Partner's capital account shall exceed twenty percent (20%) of the aggregate sum of the capital accounts of all Partners. If this limit is exceeded, a Partner must suspend monthly capital contributions until such time as his or her capital account is less than 20% of the aggregate sum. The 20% limit will be waived in the event that there are fewer than eight Partners.
6B. Additional Capital Contributions: Any Partner may be permitted to make additional capital contributions in amounts and at times decided by a two-thirds (2/3rds) vote of the Partners.
7. Value of the Club: The current value of the assets of the Club, less the current value of the liabilities of the Club, (hereinafter referred to as the "Value of the Club") shall be determined as of a regularly scheduled date and time ("valuation time") each month from the closing prices as reported in the Wall Street Journal or as obtained from an on-line source selected by the Financial Partner.
8. Capital Accounts: A capital account shall be maintained in the name of each Partner and valuation units shall be issued for each Partner's capital contribution. The number of valuation units to be issued shall be calculated by dividing the amount of the contribution by the unit value. Initially, the unit value shall be $10.00. On each valuation date, the unit value shall be recomputed by dividing the value of the Club by the number of valuation units outstanding. Capital accounts shall be maintained, showing valuation units and account value for each Partner. Each Partner shall have access to a monthly accounting of all capital accounts.
8A. Changes: Each Partner's capital account shall be increased by his share of any realized gains, dividends or other income of the Club. Each Partner's capital account shall be decreased by his share of any realized losses or expenses of the Club.
8B. New Partners: Each founding Partner shall contribute a set amount as their initial capital contribution to the assets of the Club and as a non-refundable organizational fee. Thereafter, new Partners will be charged a non-refundable organizational fee to be set by the Partners upon joining the Club as their pro-rata share of the Club's start up costs.
9. Management: Each Partner shall participate in the management and conduct of the affairs of the Club on an equal basis. Any action may be approved by the vote of a simple majority, except as otherwise stipulated by this Agreement, in the By-Laws, or in Resolutions adopted by the Partnership from time to time. In the event a simple majority vote results in a tie vote, decisions shall be made by the Partners whose capital accounts total a majority of the value of the capital accounts of all the Partners.
9A. By-Laws: The Partners may adopt by-laws regulating the business and activities of the Club; provided that this agreement shall control in the event of conflict.
9B. Power of Attorney: The activities of the Club are intended to be conducted by electronic means. In addition to the provisions of Section 5, each Partner appoints the Presiding Partner, or in his or her absence, the Assistant Presiding Partner, as the Partner's true and lawful attorney, in the Partner's name, place and stead, to make, execute, sign, acknowledge and file any certificate, document, agreement, amendment reflecting action properly taken by the Partnership and any other certificates or instruments that may be necessary for the conduct of the Partnership business.
9C. Electronic Signatures: Each Partner shall vote on matters before the Club and express their consent or opposition to any matter before the Club by electronic communications, and any such vote, consent, or action taken on any matter shall be binding upon each Partner. The Club and each officer of the Club shall be entitled to rely upon such action taken. If voting is conducted whereby those other than Partners have access to a ballot, a Partner’s identity will be verified by means of a PIN or Password selected by the Partner for that purpose.
10. Sharing of Profits and Losses: Net profits and losses of the Club shall inure to, and be borne by, the Partners, in proportion to the value of each of their capital accounts.
11. Books of Account: Books of account of the transactions of the Club shall be kept, and at all times be available and open to inspection and examination by request of any Partner.
12. Annual Accounting: Each calendar year, a full and complete account of the condition of the Club shall be made by the Financial Partner to the Partners and distributed to all Partners on an equal basis.
13. Checking Account: The Club may select a financial institution for the purpose of opening a checking account. Funds in the account shall be withdrawn by checks signed by any Partner(s) designated by the Club or by other means approved by the Club from time to time.
14. Broker Account: The Club may enter into one or more brokerage agreements required for the purchase or sale of securities. Securities owned by the Club shall be held by the broker in street name for the account of the Club, except where the securities need to be registered in the Club name to make available to the Club special direct purchases from companies or dividend reinvestment plans.
14A. Club Agents: Only designated Officers of the Club shall perform the ministerial functions of giving orders to the broker covering the purchase or sale of securities for the accounts of the Club, and then only after said purchases or sales have been approved by the Partners of the Club.
14B. Transfer of Securities: Any corporation or transfer agent called upon to transfer any securities to or from Club shall be entitled to rely on instructions or assignments signed by any duly elected Officer of the Partnership 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 Club.
At the time of a transfer of securities, the corporation or transfer agent is entitled to assume:
(i) that the Club is still in existence, and
(ii) 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. Compensation: No Partner shall be compensated for services rendered to Club, except reimbursement for expenses.
16. Additional Partners: Additional Partners may be admitted at any time, upon the affirmative vote of two-thirds (2/3) of the active members, so long as the number of Partners does not exceed sixteen (16).
16A. Admission of a Partner: To be considered for membership in the Club, a prospective Partner will complete the Club's biography form which will be circulated to all other Partners; a prospective Partner will understand and agree to all responsibilities and requirements of the Partners; understand and agree to the investment philosophy of the Club, and follow the Clubs activities and meetings in a non-voting, non-monetary capacity for a minimum of 3 months. After such interval, as determined by the Partners, a vote will be held and a Prospective Partner will be admitted to the Club as a full Partner in the calendar month following the vote, upon approval of a 2/3rds vote of the Partners, payment of the organizational fee and first month’s capital contribution, and completion of any required forms. Where the applicant has previous investment club experience, this process may be waived by a 2/3rds vote of the Partners.
16B. Removal of a Partner: Any Partner may be removed for good cause (as determined by the Partners) by the affirmative vote in both number and capital accounts of two-thirds (2/3) of the Partners. Written notice to all Partners 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.
17. Termination of Partnership: In the event of the death, disability, bankruptcy, removal or withdrawal of a Partner, the business of Club shall not be concluded and its existence shall not be terminated. The Club may be terminated by agreement of the Partners whose capital accounts total two-thirds (2/3) in value of the capital accounts of all the Partners. Written notice to all Partners of a meeting where termination of Club is to be considered shall include a specific reference to this matter. 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 or her capital account in the Club and the Partnership shall continue as a taxable entity.
18A. Notice of Withdrawal: The Partner withdrawing a part or all of the value of his or her capital account shall give notice of such intention in writing or by e-mail to the Secretary. Such notice shall be deemed to be received as of the end of the month of which it is presented.
18B. Valuation: In making payment, the value of the Club as set forth in the valuation statement prepared for the normal valuation date following the month the withdrawal notice is deemed received from a Partner requesting a partial or full withdrawal, will be used to determine the value of the Partner's account. Any non-refundable fee or organizational costs paid to the Club is not included in the valuation and is not repaid to the withdrawing Partner.
18C. Payment: The Club shall pay the Partner who is withdrawing a portion or all of the value of his or her capital account in the Partnership in accordance with paragraph 20 of this Agreement.
19. Death, Incapacity or Bankruptcy of a Partner: In the event of the death, incapacity or bankruptcy of a Partner (or the death, incapacity or bankruptcy of a grantor and trustee of a revocable living trust to which a Partner has transferred his or her interest pursuant to Paragraph 19A), receipt of notice of any such event shall be treated as a notice of full withdrawal.
19A. Transfers to a Trust or Joint Tenancy: A Partner may, after giving written notice to all other Partners, transfer his or her interest in the Club to a revocable living trust of which he or she is a grantor and trustee or to the Partner and his or her spouse or other person as tenants by the entireties or as joint tenants with rights of survivorship. In the event of any such transfer the transferring Partners social security number shall be used for tax reporting purposes.
20. Terms of Payment: In the case of a full or partial withdrawal, payment may be made in cash or securities or a mix of each at the option of the remaining Partners. In either case, the withdrawing Partner shall be responsible for all expenses related to the withdrawal, and where securities are to be distributed or converted to cash, the remaining Partners shall select the securities.
20A. Where cash is transferred, the Club shall transfer to the Partner withdrawing a portion or all of his or her interest in the Club an amount equal to the value of the capital account being withdrawn less
(i). the actual costs to the Club related to obtaining and disposing of any securities converted into cash to meet the withdrawal, and any fees related to the transfer of the withdrawal amount; and
(ii). any withdrawal penalties listed in 20D below.
20B. If the Partner withdrawing a portion or all of the value of his or her capital account in Club desires an immediate payment in cash, the Partnership at its earliest convenience may pay an amount not to exceed eighty percent (80%) of the estimated value of his or her capital account and settle the balance in accordance with the valuation and payment procedures set forth in paragraphs 18 and 20.
20C. Where securities are transferred, the remaining Partners shall select securities to transfer equal to the value of the capital account or a portion of the capital account being withdrawn less:
(i). the actual costs to the Club related to obtaining the securities and any fees related to the transfer of the withdrawal amount; and
(ii). any withdrawal penalties listed in 20D below.
20D. The withdrawing Partner shall incur a penalty for early withdrawal according to the following schedule. This penalty will based on the full withdrawal amount requested before any costs to the Club are deducted. The first of the month that he or she becomes a full Partner as set forth in Paragraph 16A shall be considered as the admittance date of a Partner.
(i). For the first 12 months of his Partnership, the Partner shall be penalized 3% of the amount withdrawn.(ii). For the 13th through the 24th month of Partnership, the Partner shall be penalized 2% of the amount withdrawn.
(iii). For the 25th through the 36th month of Partnership, the Partner shall be penalized 1% of the amount withdrawn.
(iv). After the 36th month of Partnership, the Partner shall incur no withdrawal penalty.
20E. The amount being withdrawn shall be paid in cash or by the transfer of securities to the Partner (or other appropriate entity) no later than 60 days immediately following the valuation date set forth in Paragraph 18B. If securities are transferred, the Club’s broker shall be advised that ownership of the securities has been transferred to the Partner as of the payment date.
21. Forbidden Acts: No Partner shall
(a) Have the right or authority to bind or obligate the Club to any extent whatsoever with regard to any matter outside the scope of the Partnership's purpose;
(b) Except as provided in paragraph 19A, without the unanimous consent of all the other Partners, assign, transfer, pledge, mortgage or sell all or part of his or her interest in the Club 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 or her in the Club;
(c) Purchase an investment for the Club where less than the full purchase price is paid for same;
(d) Use the Partnership name, credit or property for other than Club purposes; or
(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 Club.
22. Partners Under the Age of 18: If a person less than 18 years of age becomes a Partner of the Club, this Agreement of Partnership must be executed both by such person on his or her own behalf and also by the parent or guardian of such under age person on behalf of such person.
23. Officers: The Duly Elected Officer of the Club shall mean the Presiding Partner, Assistant Presiding Partner, Financial Partner, Assistant Financial Partner, and Recording Partner; and any assistant Officers appointed by the Partnership.
24. Modifications of this Partnership Agreement shall be approved by a two-thirds (2/3) vote of the Partners.
25. This Agreement of Partnership shall be binding upon the respective heirs, executors, administrators and personal representatives of the Partners. This Agreement, and any Amendments, may be executed by the Partners separately in multiple counterparts, each of which shall constitute one document and one agreement among the Partners.
The original Partners have caused this Agreement of Partnership to be executed on the dates indicated below, effective as of the date indicated above. Additional Partners shall sign separate signature pages and the effective date of their admission shall be indicated.
Coast to Coast On-Line Investment Club
AGREEMENT OF PARTNERSHIP
The signatures of the Partners appear below and on separate pages attached to the Agreement of Partnership dated as of April 1, 1999:
Managing Partner:
___________________________________
Managing Partner
Other Partners:
___________________________________
Signature of Partner
___________________________________
Printed Name
___________________________________
Date Signed
___________________________________
Partner's SSN
___________________________________
___________________________________
Partner's Address
Original draft: 03/24/98
Restated and amended: 04/01/99