Partnership insurance trust. This trust agreement made and executed at _________ on _________[Date], by and between _________ and _________, of _________, called partners, and _________ trust company, of _________, called trustee, witnesseth: Whereas, partners are doing business as such under the firm name of _________ in the city of _________, state of _________, and each of the partners has an equal interest in the partnership business; and Whereas, partners each desire to liquidate their interest in the partnership upon their death and in pursuance thereof have designated trustee as beneficiary in such policies of insurance described in schedule A attached and made a part hereof, and have delivered such policies to trustee; Now, therefore, in consideration of the mutual covenants of parties herein contained, parties agree that trustee shall hold the insurance policies, and hold and administer their proceeds, together with any additional policies and the proceeds thereof that may from time to time be added to this trust for the uses and purposes and upon the terms in this agreement set forth. 1. All insurance premiums, assessment and charges of every kind shall be paid by partnership and shall be charged upon the books of the partnership to the capital accounts of each partner. 2. Any and all dividends payable upon the policies held hereunder shall be paid to partnership, and shall be credited upon the books of partnership to the capital accounts of each partner. 3. Upon the death of either partner, trustee shall collect the proceeds of the insurance payable under the terms of the policies insuring the life of the partner. 4. Trustee shall pay from the proceeds of such policies, after deducting the necessary costs and expenses of the trust, a sum equivalent to _________[state fractional share] of the value of the partnership business as hereinafter determined to the personal representative of deceased partner, or if no personal representative shall have been appointed within _________ months after the death of the partner, then to his heirs. 5. If the net proceeds of the insurance policies are insufficient to pay such _________[fractional share] of the value of the partnership business, the entire net proceeds shall be paid over as hereinabove provided, and the surviving partners may pay the difference. 6. The value of the partnership business for the purposes of this agreement shall be fixed upon a basis of _________ dollars or the book value as determined hereunder, whichever shall be the greater. The book value shall be determined as follows: _________. 7. This trust shall terminate on the payment of the _________[fractional part] of the value of the partnership business, or payment of the net proceeds plus the contributions by the surviving partners as above provided. 8. Upon such payments being made as above provided, the interest of the deceased partner in and to partnership shall cease and thereupon pass to and vest in the surviving partners. 9. Upon termination of the trust as herein provided trustee shall deliver to the surviving partners the insurance policies held hereunder insuring their lives.
10. Each partner reserves the right to withdraw from time to time any or all of such policies and deposit or pledge the same as collateral security for a loan or loans, provided that each partner consents to any such act by an instrument in writing delivered to trustee, signed by all partners. This agreement shall be binding upon the parties hereto, their heirs, assigns, executors and administrators. In witness whereof, etc.