Partnership Agreement HPD Investment Group

 

 

 

THIS AGREEMENT OF PARTNERSHIP, effective as of January 11, 2006, by and between the undersigned to wit:

 


Gregory Gainer

Gary Walker

James O’Connor

Kathe Larkin

Sharon Uliana

Nancy Montague

Joe Thomas

Matt Olson


 

NOW, THEREFORE, IT IS AGREED:

1.        Formation. The undersigned hereby form a General Partnership in accordance with and subject to the laws of the Commonwealth of Virginia.

2.        Name. The name of the partnership shall be the HPD Investment Group.

3.        Term. The partnership shall begin on January 11, 2006 and shall continue until December 31 of the following year and thereafter from year to year unless earlier terminated as hereinafter provided.

4.        Purpose. The only purpose of the partnership is for the education and benefit of the partners by investing the assets of the partnership solely in stocks, bonds, and other securities ("securities").

5.        Meetings. Periodic meetings shall be held as determined by the partnership. A quorum for the transaction of business shall be one-half of the membership of the Association, rounded down to the nearest whole person.   Election of officers and the transaction of other business, including purchasing decisions, shall be by a majority of the members present and voting, providing a quorum is present. For the purpose of determining a quorum, if a member has granted another member a proxy in one of the methods described below, that member is considered “present” in counting the numbers of members present at the meeting

 

A member is “present” if he or she is either at the meeting in person, or is participating via the telephone or other direct audio, audio/video or electronic link that enables virtually real time participation in the discussion. 

 

As an alternative, if a member cannot be present, he or she can grant a “proxy” to another member to vote on a particular matter in one of four ways:  a broadcast email to the entire group granting that member’s proxy to a specific other member to vote on a particular issue, including buying stock or voting for office.  The second method involves the member who cannot be present granting his/her proxy via an email to the entire group to the secretary or other officer present to vote “in accordance with the majority” on particular types of questions such as purchase decisions.  The third method involves a written conveyance of proxy by the member who cannot be present at a meeting to another member via email or written note (signed) sent by mail or hand delivered.  If this third method is used, and it is in the form of a written note, the actual note conveying the proxy must be presented to the group at the meeting and retained by the treasurer and this will be so noted in the minutes of the meeting.  If the conveyance of proxy is via email, the existence and terms of the email must be confirmed by the members before a vote is taken. A printout of the email should be included with the minutes of the meeting.  If an actual signed note is produced/or if an email is verified, the member who granted the proxy is bound by the results of the vote.   As an alternative, a voice or electronic confirmation of the granting of proxy during the meeting is acceptable unless an individual has informed the group that he or she will not grant a proxy in this manner and only written/electronic proxies are acceptable.   

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 the partners.

7.        Value of 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 Group.  This information will be posted as soon as is possible by the Treasurer or his/her delegate to the “members’ only” section of the HPD Investment Group website.

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 account may be substituted for the method, provided the substituted method results in exactly the same valuation as previously provided therein. Each partner's capital contribution to, or capital withdrawal from, the partnership, shall be credited, or debited, respectively, to that partner's capital account.

9.        Management. Each partner is expected to participate equally in the management and conduct of the affairs of the partnership. When an action of the partnership requires a vote of the membership, each partner present shall cast one vote.  It is possible for a member to grant to another member his/her  “proxy” to vote on a matter, as described in paragraph 5 above.   

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 capital accounts.

11.     Books of Accounts. Books of accounts 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, at the December meeting, the Treasurer shall make a full and complete account of the condition of the partnership 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.  No partner of the HPD Investment Group may act as a broker or dealer for the group. A broker shall be selected by the membership. Brokerage may be performed in any fashion decided upon by the membership. No transactions shall be executed without a majority vote by the group. 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 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 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, upon the unanimous consent of all the partners, so long as the number of partners does not exceed twenty (20).

17.   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.

18.     Removal of a Partner. Any partner may be removed by agreement of the majority of the group. Written notice of a meeting where removal of a partner is to be considered shall include a specific reference to this matter. In consideration of removal, the group shall weigh such matters as the degree of the partner’s participation, the regularity of investment payment, tenure in the group, and any special circumstances. 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 noted in paragraphs 20 and 22. The vote action shall be treated as receipt of request for withdrawal.

19.     Termination of Partnership. The partnership may be terminated by agreement of the majority of the group. 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. The partnership shall terminate upon a majority vote of all 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.

20.     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 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. 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 capital 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 22 of the Agreement.

 

21.     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 17 hereof), receipt of notice of such an event shall be treated as notice of full withdrawal.

 

22.     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 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 ten (10) days after the valuation date used in determining the withdrawal amount. Each Partner will be limited to two partial withdrawals during any one calendar year.

 

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 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 sections 20 and 22.

 

When 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 group's valuation statement prepared to determine the value of that partner's capital account in the partnership. The Group'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.

 

23.    Alternative Terms of Withdrawal of a Partner

 

Regardless of the terms of paragraphs 18, 20 and 22 above, if the withdrawing/removed partner requests an alternative payout method, or an alternative valuation date, or a change in the notice requirement, and the Partnership unanimously agrees to this alternative or negotiates an alternative agreeable to all partners and the withdrawing partner, that method may be used.  Conversely, if the partnership suggests an alternative payout method or alternative valuation date than that described above, and all the partners agree, then an alternative method may be used.

 

24.     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 17, 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 a 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 purpose of the partnership.

 

25.     Amendments to This Agreement. Amendments to this agreement will require written notice to be given to each partner in advance of the meeting at which the amendment will be considered.  The written notice must include information about the type of amendment to be voted upon and the reason why it is being considered.  Any amendment requires an affirmative vote of two-thirds of the members present and voting.

 

26.      This Agreement of Partnership shall be binding upon the respective heirs, executors, trustees, administrators, and personal representatives of the partners.

 

27.     Additional Provisions:  This partnership agreement incorporates the HPD Investment Group Operating Procedures, a copy of which is posted on the club’s website.  A copy of the current procedures is attached to this agreement, and by signing this agreement, the partner acknowledges having received and understood the procedures.  Procedures can be changed after notice given, discussion by the group and a simple majority vote 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.

 

 

Name: ____________________________________   Name: ___________________________________

 

Date: _____________________________________  Date: ____________________________________

 

 

Name: ____________________________________   Name: ___________________________________

 

Date: _____________________________________  Date: ____________________________________

 

 

Name: ____________________________________   Name: ___________________________________

 

Date: _____________________________________  Date: ____________________________________

 

 

 

Name: ____________________________________   Name: ___________________________________

 

Date: _____________________________________  Date: ____________________________________

 

 

Name: ____________________________________   Name: ___________________________________

 

Date: _____________________________________  Date: ____________________________________

 

 

Name: ____________________________________   Name: ___________________________________

 

Date: _____________________________________  Date: ____________________________________

 

 

 

 

 


 

 

 

Operating Procedure for the HPD Investment Group     Effective Date:_January 11, 2006

 

Duties of Partners

        Annually, at the meeting in November, partners shall elect the following positions and assign duties as described below by a majority vote.  The effective terms of the officers shall commence in January of the following year.

        1. President. The President's duty is to preside over meetings, set meeting dates and locations, appoint committees, and see that resolutions passed by the partnership are carried out.

        2. Vice-President. The Vice-President takes the place of the President when the President is absent or incapacitated. The Vice-President shall also regularly contribute to the investment-oriented education of the group.

        3. Secretary. The Secretary's duty is to keep a record of the actions authorized by the partners and notify partners of meetings and other activities.

        4. Treasurer. The Treasurer's duty is to keep a record of the Group's receipts and disbursements and partners' interests in the Group. The Treasurer will give partners records for payments, execute the buy

and sell orders authorized by the partners, and prepare the Group's monthly Valuation Statement. He/She will see that the needed tax information is compiled and file the necessary reports.

 

Notice

 

·         A primary means of communication of this group is electronic mail (email).  All partners shall convey their email address to the person who maintains the mailing list of the HPD Investment Group.  Each partner agrees to ensure that the email address on the list shall be current.  If the notice of a meeting, of an election, or of an amendment to the articles of agreement is not received by a member due to his or her failure to provide a current email address, the notice is considered as given.  Ground mail addresses and work and home phone numbers shall also be maintained on the HPD web site for all members.

 

·         If there is a technical problem with delivery of notice of a meeting, election or of an amendment to the articles of agreement, and one or more partners does not receive this message due to the technical problem, and the problem is not identified and notice is not delivered in some other fashion (via the telephone, for example, or U.S. Mail or in person) then adequate notice is considered not to have been given for purposes of conducting the business of the group.

 

·         If, after the fact, the member who did not receive notice waives his/her right to have received notice of a partnership meeting, and in that event, provided a quorum was achieved and a proper vote taken, the action is deemed proper and the partnership can act upon it.

 

Guests

        Partners may invite guests to any meeting of the group as long as advance consent is obtained from the host of the meeting.  It is desirable to notify the presiding officer as well. 

 

If the Group decides that they are not interested in inviting new members to join, then this open invitation is rescinded and Guests are not welcome at meetings, except for general informational purposes (if they want to know what happens at an investment club meeting.

 

When consideration is given to adding partners to the Group under paragraph 16 of the Group's partnership agreement, anyone considered shall have been a guest for at least two prior meetings.

 

New Members

        New members will invest a one-time sum of $500. This may be broken into smaller monthly payments as small as $100. In addition, new members will invest the regular monthly sum of at least $40.  To make the math simpler, any amounts should be in multiples of 10.


 

HPD Investment Group Operating Procedures, Page 2 of  2.   Effective Date: January 11, 2006

 

There are other fees incurred by the club.  These fees can include, but are not limited to,  NAIC membership and materials, club insurance, state registration fees, etc.  When such a fee is brought before the membership for discussion, a decision will be made whether it will be funded out of club funds or out of additional fees collected from the members.   A three-quarters majority vote is needed to make this funding decision.  If it is at all possible, notice that such a fee will be considered will be included on the agenda, including a best guess as to the amount per partner.

 

The balance of club funds will be invested in stocks, bonds, mutual funds, money market funds or cash accounts, and may be redeemed upon leaving the group, in accordance with the valuation and payment procedures set forth in sections 18 and 20.

 

        Should a member leave the group, he may not be eligible to re-enter for a period of nine months.

 

Meetings

        The Group shall hold a monthly meeting at a time and place designated by the Group. Special meetings may be called by the President upon similar notice to the other partners.

 

 

Procedure

        The monthly valuation statement shall be effective as of the last business day of the month preceding each regularly scheduled monthly meeting. In maintaining the records of each partner's capital account in the Group, the unit value method as outlined in Chapter 20 of the NAIC Investors Manual shall be used.

Minimum monthly deposit in the group will be $40 per partner. Additional deposits in the group may be made, with the limitation noted in paragraph six (6) of the partnership agreement, that no one partner’s account shall exceed twenty percent (20%) of the capital accounts of all the partners..

 

HPD members will prepare an NAIC Stock Selection Guide (or equivalent) on securities for presentation to the partnership at meetings. Buy and/or sell action may be decided at the meeting following the presentation, after a period of discussion by the members, and when approved by vote of a simple majority. 

 

·         Each partner shall provide a brief monthly update for each stock for which the partner is responsible for monitoring.  The purpose of this exercise is to make sure that the club is alerted to any substantial change in the circumstances of the company that may influence a decision whether to continue to hold that stock.

·         Annually, a comprehensive update report will be made to the group on each stock held by the partnership by that member who is responsible for monitoring that company to enable the partnership to decide whether to hold or sell the stock.

 

 

The partnership agreement and these operating procedures will be posted in the Members Only Section of the HPD Web site for the convenience of the partners.  However, only the original hard copy of the agreement that is signed by all the partners shall be the true copy of the partnership agreement.  Any partner may request and receive an original, hard copy of the partnership agreement for his/her records.  An officer of the club shall retain an original signed hard copy of the agreement at all times.

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