__________, herewith form a general partnership to be known as the ______ Investment Club.

The partnership shall commence on _____________________ and shall continue for a period of five years, and then thereafter year for year, unless earlier terminated by this agreement.

Each partner shall on or before _____________________ make an initial capital contribution of $_____ (____________________& __/100 dollars).

Partners shall be entitled to make additional capital contributions of at least $____ (____________________& ___/100 dollars) at any regular meeting of the partnership, provided, however, that the no partners capital contribution shall at any time exceed _______ percent of the total capital of the partnership. Profits and losses shall be allocated to each partner in the same proportion as their capital account bears to the total capital of the partnership.

Books of account shall be created and maintained of all transactions of the partnership. A yearly report shall be presented to members of the results of the operation of the partnership. The books shall be open to examination by partners at all reasonable times. Upon a vote of the partners, an accounting firm may be appointed to perform bookkeeping or other services. It shall not be necessary for the affairs of the partnership to be audited; however, upon the vote of the majority of the partners an audit may be commissioned.

The partners shall by vote designate an official depository for funds. Withdrawals shall be made by the signature of partners.

The partnership shall hold regular meetings at least quarterly. The time and place for the holding of meetings shall be determined by vote of the partners. At the first regular meeting of the partners, the partners by majority vote shall elect a presiding officer who shall act as the Chairman of meetings. Meetings shall be held following Robert’s Rules of Order to the extent that the same are appropriate.  Thereafter, each year, a new Chairman shall be elected.  Partners may appoint any other partner, and only another partner, to act as their proxy at any meeting which proxy shall be required to be in writing. Voting shall be by percentage of capital. No quorum shall be required for regular business; however, the following business shall require a quorum of the members, determined by percentage of capital at the beginning of the meeting:

(a) dissolution or other termination of the partnership;
(b) changes in the partnership agreement

All business of the partnership shall be determined by a simple majority of the partners present, except for dissolution or changes in the partnership, which shall require a 2/3 majority.

Upon the vote of a majority of the partners, a special meeting may be held upon 10 days prior notice.

Each partner shall have the right to participate in the management of the partnership including the selection of investments. No partner shall have the right or authority to bind or to obligate the partnership, except in accordance with a vote of the members.

No business shall be conducted with any brokerage, bank or other institution in which any partner has a financial interest, or is employed, except an interest as a shareholder in a publicly traded company which does not exceed 5% of the outstanding shares of the company, unless after a disclosure, the partners by majority vote assent thereto. All partners shall disclose such conflicts to the other partners.

The partnership interests herein may not be assigned or transferred without the approval of a majority of the partners.  This approval shall not be unreasonably withheld.

New partners may be admitted upon a majority consent of the existing partners. The minimum initial capital contribution of a new partner shall be $_____ (_______________________& ___ /100 dollars). The amount necessary for such admission may be changed no more often than yearly upon motion and vote by the partners.

The total number of partners shall not exceed _____________________.

The partnership shall not purchase securities on margin.

The partnership may not purchase investments of the following types:
__________________________________________________________________

The partners may designate a broker or brokers for trading of securities; however, the partnership may not grant discretionary trading authority to any brokerage.

A partner may withdraw by notice to the partnership. The partnership shall not be dissolved by such withdrawal unless the remaining partners determine not to continue the business of the partnership.

Upon withdrawal, a partner shall receive the value of their capital account as of the date of their withdrawal within 30 days, except that if the repayment of the capital account of any withdrawing partner shall require the liquidation of securities the repayment of the capital account may be postponed for no more than 14 additional days to allow a vote of the members to determine which securities to liquidate.  Upon this withdrawal, the partner shall render a hold harmless agreement naming the Partnership and the individual partners for everyone’s protection.

Upon the death, incapacity or legal disability of a partner, the same shall be deemed to be a withdrawal, and the disability of any partner, the capital account of the partner shall be repaid as is provided above.

1. Notices.

Any notice required by this Agreement or given in connection with it, shall be in writing and shall be given to the appropriate party by personal delivery or a recognized over night delivery service such as FedEx.

See Exhibit 1 for the name and addresses for each partner.

2.  No Waiver.

The waiver or failure of either party to exercise in any respect any right provided in this agreement shall not be deemed a waiver of any other right or remedy to which the party may be entitled.

3.  Entirety of Agreement.

The terms and conditions set forth herein constitute the entire agreement between the parties and supersede any communications or previous agreements with respect to the subject matter of this Agreement.  There are no written or oral understandings directly or indirectly related to this Agreement that are not set forth herein.  No change can be made to this Agreement other than in writing and signed by both parties.

4.  Governing Law.

This Agreement shall be construed and enforced according to the laws of the State of ____________________ and any dispute under this Agreement must be brought in this venue and no other.

5.  Headings in this Agreement

The headings in this Agreement are for convenience only, confirm no rights or obligations in either party, and do not alter any terms of this Agreement.

6.  Severability.

If any term of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, then this Agreement, including all of the remaining terms, will remain in full force and effect as if such invalid or unenforceable term had never been included.

In Witness whereof, the parties have executed this Agreement as of the date first written above.

_________________________                _______________________
Each Partner                                Each Partner

_________________________                _______________________
Each Partner                                Each Partner

_________________________                _______________________
Each Partner                                Each Partner

If there are more partners, have them sign below as well.

___________________
Date
Exhibit One:  Names & Addresses of all partners for contact purposes

Investment Club Partnership Agreement
Review List

This review list is provided to inform you about this document in question and assist you in its preparation.  Investment club results have been overstated in the media.  The Beardstown ladies, for example, turn out to have had much lower results than the overall market.  It was a great story but, like many great stories, not true.

With this warning in mind, be sure to have an agreement in place if you enter into an investment club.  Be sure all parties are signatories to the agreement.  When a partner withdraws from the partnership, consider always requiring a hold harmless agreement from them to the partnership and all of the other parties as part of that withdrawal.  This approach has been incorporated in the above document.

1. Make multiple copies.  Keep one in a safe deposit box or home safe.  Give a copy to each member.

CONFIDENTIAL

To:

_______________ Offering of $ _________________, ______________________, Offered at ________________________ Per share.

Name: _________________________ Memorandum Identification Number: _____________

________________________ was formed on ___________________________ as a new _____________________ corporation.

Information concerning initial directors:
________________________________________________________________

This corporation is formed for the purpose of:
________________________________________________________________

The interests are speculative in nature; they are subject to certain restrictions on transfer which may result in the lack of a ready market for resale; they are subject to certain material risks; there are material income tax considerations associated with their purchase; and, the operation of the corporation may involve transactions between the corporation and the founders which could result in conflicts of interest. (Please see “Risk Factors.”)

This offering will result in $ ________ (_________________ & ___/100 dollars) cash to the corporation.

This Memorandum supersedes any and all previous information supplied by the corporation.  It has been prepared solely for the benefit of persons interested in the proposed private placement of the shares offered hereby, and any reproduction or distribution of this Memorandum in whole or in part, or the divulgence of any of its contents without the prior written consent of the corporation, is prohibited.  By accepting delivery of this Memorandum, the recipient agrees to return it and all enclosed documents to the corporation if the recipient does not purchase the interests offered in this Memorandum.  Only the information expressly set forth in this Memorandum, or contained in documents furnished by the corporation upon request, may be relied upon in connection herewith. All recipients of this document have been required to execute a prior “non-disclosure” agreement. This document and all exhibits is a trade secret and confidential.

This Memorandum does not constitute an offer or solicitation in any jurisdiction in which such an offer or solicitation is not authorized.  In addition, this Memorandum constitutes an offer only if a name and memorandum identification number appear in the appropriate spaces provided on the cover page, and then only to such person.

Prospective investors should carefully consider that there are tax risks associated with this offering.

Prospective investors are not to construe the contents of this Memorandum, or any prior or subsequent communication from the corporation, its affiliates, or agents, as legal or tax advice.  Each prospective investor should consult his own counsel and accountant as to tax matters and related matters concerning this investment.

The interests are offered only to a limited number of persons who have knowledge and experience in financial and business matters, who are capable of evaluating and bearing the economic risks of this investment, and who are acquiring these interests for investment purposes and not with a view to a resale or distribution.  These securities are issued in reliance on the exemption from registration granted by _____________________ law.   Exemptions from registration afforded by the Securities Act of l933 and similar statutes in the states in which this offering is made may also apply.  The interests may not be transferred in the absence of an effective registration statement or an opinion of counsel acceptable to the corporation’s counsel that an exemption from registration is available.

No person is authorized to give any information or to make any representation relative to this offering that is not contained in this Memorandum.  Any information or representation not contained herein must not be relied upon as having been authorized by the corporation. Except as otherwise indicated, this private placement memorandum speaks as of the date on the cover page.   Neither the delivery of this private placement memorandum nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the corporation since the respective dates at which the information is given herein or the date hereof.

THE OFFERING
The offering consists of ________ shares of ________ par, ______________________ at $ _______ at ________ per share.

The shares will be offered for a period of ____________ which period may be extended at the discretion of the corporation. The corporation may subscribe to the shares offered hereby.

The shares will be evidenced by certificates executed by the president and secretary of the corporation.  The shares offered hereby will be sold only to those persons who take such shares for investment and not with a view to offer for sale, or for resale, in connection with the distribution or any transfer thereof.  No shares will be sold to any person unless such person represents and warrants to the corporation that he is not participating, directly or indirectly, in a distribution or transfer of such shares, nor participating, directly or indirectly, in the underwriting of any such distribution or transfer of such shares.  Each person purchasing shares pursuant to this Memorandum will also be required to warrant and represent to the corporation that he will not act in any way that would constitute him to be an underwriter within the meaning of the Securities Act of l933.

The shares will carry preemptive rights for purchase of any secondary offerings. In addition investors will be required to execute a shareholders agreement providing a right of first refusal to other shareholders and to the corporation upon any resale.

USE OF PROCEEDS
The proceeds from the offering described in this Memorandum will be used to fund:
________________________________________________________________

CONFLICTS OF INTEREST
Because the founders may, on behalf of the corporation, engage in transactions with himself or affiliates, prospective shareholders should recognize that such transactions might place the trustees of the corporation in “conflicts of interest” situations. A summary of the agreements to be entered into is attached hereto.

RISK FACTORS
The purchase of the shares involves certain risk factors. It is suitable only for persons of adequate means who have no need for liquidity in a portion of their investments.  The following risk factors should be considered before making an investment decision; they are not a complete list:

Tax treatment of the investment.  Tax treatment of the results of this investment will vary by investor.  There is the risk in any venture that the tax treatment desired by investors or the venture will not occur, or that the tax rules will change.

Long-term Nature of Investment.  Potential investors should be aware of the long-term nature of the investment in the corporation.  Each investor must warrant that he is purchasing the shares for investment purposes and not for resale.  Also, transfer of the shares will not be permitted without the receipt of an opinion of counsel, acceptable to the Board of Directors of the company as well as company counsel that such transfer would not violate applicable securities laws.  Such an opinion may not be available unless the corporation elects to register under applicable securities laws.  The corporation presently has no plans to so register.  Even if transfer were possible it is likely that no market would exist for the shares.  Because the success or failure of the venture may not be known for many years, an investor may find himself the owner of an interest which may not be profitable, and which he cannot transfer.

Indemnification of the Management and Board of Directors. Agents and directors of the corporation are, subject to certain conditions, to be indemnified by the corporations against certain liabilities.

Absence of Independent Counsel.  Unless an individual investor’s counsel has reviewed this Memorandum and advised the investor concerning an investment decision, the shareholders and corporation will not have been represented by independent counsel in connection with this offering.  Interested investors should seek legal and accounting advice from independent persons prior to proceeding. (Please note such advisors must also execute a non-disclosure.)

Dilution of equity.  Predicting the future is difficult. However, reason dictates that there will be a dilution of the equity position of investors in future fund raising, if needed.

Debt to Equity Ratio.  The investment contemplated herein may have a high debt-to-equity ratio.  If later operating revenues decline because products cannot be successfully marketed, there will be a disproportionately severe effect on the values of the corporation interests and the cash flow available for distribution. Risk of decline of the economy. The economy of the world or the United States may return to recession, which could result in the target businesses not committing capital to new products, no matter how attractive.

INVESTOR SUITABILITY STANDARDS
Purchase of the shares offered hereby is suitable only for persons of adequate financial means who have no need for liquidity to the extent of their investment herein.
Prospective purchasers should invest in this offering only after considering the following:
1.  The prospective purchaser of any shares should have a net worth (i.e., total assets in excess of total liabilities) of at least $1,000,000, (individually or combined with a spouse) exclusive of home, furnishings and automobiles; or, the investor should have annual gross income of at least $200,000 or the investor should purchase in excess of $150,000 of this offer, which amount does not exceed 20% of investor’s net worth  (individually or combined with a spouse).
2.  The overall commitment of the prospective purchaser to investments which are not readily marketable or transferable should not be disproportionate to his net worth, and his investment in the shares subscribed to should not cause such overall commitment to become excessive.
3.  The prospective purchaser should have adequate means of providing for his current needs and personal contingencies; should have no need for liquidity in his investment in the shares; and should have the ability to bear the economic risk of this investment; and,
4.  The prospective purchaser, or his offeree or purchaser representative, if any, should have such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of this investment.

HOW TO SUBSCRIBE
The corporate shares offered by this Memorandum are being offered and sold by the corporation.

RESTRICTIONS ON RESALE, READ CAREFULLY
The corporation interests offered hereby have not been registered under the Securities Act of 1933 nor have they been registered by any similar review process in any state.  The corporation has no plans to seek such registration.  Accordingly, the interests must be held indefinitely unless they are subsequently registered under that Act or unless an exemption from such registration is available, and until the corporation has been provided with an opinion of counsel satisfactory to it and its counsel to the effect that registration is not required, and that any such transfer complies with all federal and state securities laws and will not jeopardize the corporation’s status.  Purchasers have no right to require any registration to be effected by the corporation and the corporation is not obligated to supply any shareholder with information necessary to enable them to make sales.

All shareholder certificates issued will bear a restrictive legend which, in substance, will state:  “The interests have been sold in reliance on exemptions from registration afforded by the Securities Act of l933, as well as registration exemptions provided by similar statutes in the various states in which this offering is made.  The interests may not be transferred in the absence of an effective registration statement, or an opinion of counsel acceptable to the corporation’s counsel that an exemption from registration is available.” In addition, the shares shall be endorsed with proper language regarding the first right of refusal held by the corporation and other shareholders.

ACCESS TO ADDITIONAL INFORMATION
The founders offer the opportunity to each potential investor to have access and to review at the corporation’s office, prior to sale, material which would assist an investor in reaching an investment decision.    The founders will also be available, prior to sale, so that potential investors may have the opportunity to ask questions of, and receive answers from, the founder concerning the terms and conditions of the offering, and to obtain any additional information (to the extent the incorporator possess such information or can acquire it without unreasonable effort or expense) which may be necessary to verify the accuracy of the information contained in this Memorandum.

Notices.

Any notice required by this Agreement or given in connection with it, shall be in writing and shall be given to the appropriate party by personal delivery or a recognized over night delivery service such as FedEx.

If to the Corporation: _____________________________________________________.

If to the Investor: ___________________________________________________.

No Waiver.

The waiver or failure of either party to exercise in any respect any right provided in this agreement shall not be deemed a waiver of any other right or remedy to which the party may be entitled.

Entirety of Agreement.

The terms and conditions set forth herein constitute the entire agreement between the parties and supersede any communications or previous agreements with respect to the subject matter of this Agreement.  There are no written or oral understandings directly or indirectly related to this Agreement that are not set forth herein.  No change can be made to this Agreement other than in writing and signed by both parties.

Governing Law.

This Agreement shall be construed and enforced according to the laws of the State of ____________________ and any dispute under this Agreement must be brought in this venue and no other.

Headings in this Agreement

The headings in this Agreement are for convenience only, confirm no rights or obligations in either party, and do not alter any terms of this Agreement.

Severability.

If any term of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, then this Agreement, including all of the remaining terms, will remain in full force and effect as if such invalid or unenforceable term had never been included.

In Witness whereof, the parties have executed this Agreement as of the date first written above.

_________________________        _______________________
Corporation                        Investor
Social Security Number:
___________________
Date

Private Placement Memorandum
Review List

This review list is provided to inform you about this document in question and assist you in its preparation.  This document is required for capital raises of private companies.  It is a pro forma agreement that will stand up as well as any with regards to investor litigation.  No document can protect you from litigation in this regard.  They can minimize the negative consequences of such a suit.  As an investor, no document can protect you adequately from a poor choice of investments.  Investors rarely recover on these matters as a practical matter.  Therefore, decide on the practical merits of the investment and do not rely on any documents to “get you whole.”

1. Make multiple copies.  Give one to each investor and keep a record of all signed copies in the corporate records.  Be sure to ratify the acceptance of such investments; have the investors sign for their actual stock certificates.

State of _______________
County of _____________

___________________, being first duly sworn on oath deposes and says that ___ is an adult and resides at _____________________.

1. The certificate(s) representing the following described shares of stock has been lost,
stolen or destroyed: ____________________________.

Registered owner’s exact name as it appears on the original certificate:
Issuer’s name:
Number of shares:

2.    The above-described stock is solely owned by ________________.

3.    That Affiant has made or caused to be made a diligent search for said securities and
has been unable to find or recover same.  Neither said securities nor any interest therein has been sold, assigned, endorsed, pawned, pledged for any bank or brokerage loan or otherwise, or disposed of in any manner by or on behalf of said owner.  Neither said owner nor anyone on said owner’s behalf has signed any power of attorney, any stock power, or other assignment or authorization respecting the same which is now outstanding and in force.  No person, firm or corporation has any right, title, claim, equity, or interest in, to, or respecting said securities, excepting the sole owner above named.

4.  That this affidavit is made for the purpose of inducing the issuance of a new or duplicate certificate in substitution of or in exchange for said lost, stolen or destroyed certificate without requiring the surrender of the original, or the payment, delivery, exchange, or credit in respect of such original without such surrender, and/or inducing to issue an indemnity bond.

5.  If such new or duplicate certificate(s) is so issued, countersigned and registered, or such payment, delivery, exchange or credit is made in respect of such original(s), then it is understood and Affiant hereby agrees that if said lost certificate comes into Affiant’s control or custody, the recovered stock certificate will be delivered to the issuer or, at issuer’s request, to issuer’s Transfer Agent, for the purpose of cancellation.

_____________________
Owner of Stock

Acknowledgment:  Subscribed and sworn to before me this __day of ______, 20______.

__________________
Notary Public
My commission expires:

Lost Stock Certificate, Affidavit of
Review List

This review list is provided to inform you about this document in question and assist you in its preparation.  When you lose a stock certificate, first contact the issuing company to advise them of the circumstances and request guidance regarding replacement.  Call or write the corporation’s headquarters and ask for the investor relations department; the fastest method these days is to go to their website, find Investor Relations, and contact them that way.  You should start by preparing this affidavit.  It puts all of the information in order.  Even if they require using their document this will get you primed.

1. Use a notary.  All states allow that.  There are shortcuts in some states but it is far simpler, as always, to do it right and get a formal document such as this one notarized.  Duplicate originals are a good idea.  Send the original to the company and retain the other for backup, along with a couple of copies for your records.

__________, referred to as SELLER, and ______________, referred to as PURCHASER, agree:

PURCHASER shall purchase from SELLER ___ shares of Class ___ shares of ______ stock, issued by _________________________, in consideration of:

A promissory note in the amount of $________(______________& ___/100 dollars) secured by a pledge of the stock and/or  $_____ (______________&___/100 dollars.)

The shares purchased are not registered with the United States Securities and Exchange Commission, or the Securities Commission of any state.

The PURCHASER represents that it is qualified under the relevant rules and regulations of the United States Securities and Exchange Commission and the Securities Commission of any state, which may have jurisdiction to purchase these shares.   Purchaser represents they are an accredited investor or investment group as defined by current investment US and state laws.

The PURCHASER further represents that it is not purchasing these shares with an intention of resale, nor will it take any actions that may result in it being considered an underwriter of the shares.

Purchaser understands that as private securities this is a speculative investment with substantial risk that it is willing to undertake even though it may lead to a total write-off of this investment in question.

Prior to any transfer of these shares, the PURCHASER shall provide to the issuer of the stock a legal opinion, in a form acceptable to the counsel for the issuer, that the transfer will not result in the loss of the exemptions from registration of the securities then claimed by issuer.

The PURCHASER further represents that it has had adequate opportunity to obtain any information relevant to the decision to purchase, and has also had adequate opportunity to consult with advisors of their choice.

The PURCHASER agrees to execute the Shareholders Agreement dated ________________ as a condition of this purpose and herein ratifies its total acceptance of that Agreement.

This is the entirety of the agreement between the parties.  Any disputes must be brought in the city of __________ in the state of _______________, and no other.

Dated: ____________________________

_________________________________________________
Purchaser
_______________________________________________
Seller

Purchase & Sale of Private Shares
Review List

This review list is provided to inform you about this document in question and assist you in its preparation.  The purchase of private shares is fraught with difficulty for a purchaser yet offers the greatest upside potential at the same time.  This document is intended to underscore the risk as well as the professionalism of the investor to insulate the company and the selling shareholder from litigious attack.  If you are the purchaser, be sure to accept the risk and understand the consequences before voyaging into these waters.  Legal documents rarely result in any financial recovery so be doubly sure you want to make the investment.

1. Make multiple copies.  Give one to each signatory and keep one copy with the transaction file.

Date: _________

LETTER OF CREDIT (GENERAL)

__________________________
__________________________
__________________________

Sir:

We hereby agree to accept and pay at maturity any draft or drafts on us, at sight, issued by __________________________, of __________________________, to the extent of $_____(________________________ & _____/100 dollars), and negotiated through your bank.

Most respectfully yours,

_____________________________________

__________________________ by: ________________
Letter of Credit

Review List

This review list is provided to inform you about this document in question and assist you in its preparation.  A L/C is a standard document to provide for guaranteed payment.  This document will suffice.

1. Make multiple copies.  Give one to each related party and keep one with the transaction file involved.

The undersigned, a shareholder of _________________________, herewith dissents and disapproves of the disposition of assets of the corporation of ____________________________, which constitute ________________ percent of the assets of the corporation, to __________________________, on the following terms:
__________________________________________________________________

Number of shares: _________________________
Class of shares: ________________________

The undersigned further demands their rights under the corporation law of _________________.

Dated: _____________________

_____________________________________
Shareholder

Dissent Notice of Shareholder:  Regarding Sale of all Assets of Corporation
Review List

This review list is provided to inform you about this document in question and assist you in its preparation.  This Dissent form can be adapted to a number of different issues relating to stockholder dissent.  It can be most effectively used in small private companies with a few shareholders.  You can add to the number of shareholders in providing your protest.  This formal approach can often lead to a negotiated settlement.

1. Keep a copy of the signed letter.