SOLAR POWER INTEGRATORS GENERAL PARTNERSHIP AGREEMENT By and Between and SOLAR POWER INTEGRATORS, COMMERCIAL, INC.
SOLAR
POWER INTEGRATORS
By
and Between
J.R.
▇▇▇▇▇▇ & ASSOCIATES, INC.
and
SOLAR
POWER INTEGRATORS, COMMERCIAL, INC.
TABLE
OF CONTENTS
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ARTICLE
I
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1
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NATURE
OF PARTNERSHIP
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1
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1.1
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Formation
of General Partnership.
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1
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1.2
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Name
of Partnership.
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1
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1.3
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Purpose
of Partnership.
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1
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1.4
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Principal
Place of Business.
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1
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1.5
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Term.
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1
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1.6
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Statement
of Partnership and Fictitious Business Name Statement.
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2
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1.7
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Definitions.
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2
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ARTICLE
II
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4
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ADMISSION
OF PARTNERS; MANAGING PARTNER
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4
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2.1
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Members
of Partnerships.
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4
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2.2
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Admission
of a Substituted Partner.
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4
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2.3
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Assignee
Partner.
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5
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2.4
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Managing
Partner.
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5
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ARTICLE
III
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5
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FINANCIAL
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5
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3.1
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Initial
Capital Contributions.
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5
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3.2
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Loans
to Partnership.
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6
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3.3
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Additional
Capital Contributions.
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6
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3.4
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Interest
on Capital and Income Accounts.
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9
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3.5
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Allocation
of Profits and Losses.
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9
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3.6
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Computation
of Profits and Losses.
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10
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3.7
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Required
Current Distributions of Net Cash.
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10
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3.8
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Discretionary
Distribution of Net Cash.
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10
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3.9
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Repayment
of Loans and Liquidated Damage.
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10
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3.10
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Loans
by Partners; Default Capital Contribution.
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10
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3.11
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Other
Distributions and Compensation to Partners and/or
Affiliates.
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11
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3.12
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Maintenance
of Books of Account.
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11
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3.13
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Location
of Books of Account.
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11
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3.14
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Inspection
of Books of Account.
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11
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3.15
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Method
of Accounting.
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11
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1
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3.16
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Fiscal
Year.
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11
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3.17
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Capital
Accounts.
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11
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3.18
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Financial
Statements and Interim Reports.
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12
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3.19
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Banking.
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12
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ARTICLE
IV
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12
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RIGHTS,
POWERS, DUTIES, AND RESTRICTIONS OF PARTNERS
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12
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4.1
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Managing
Partner.
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12
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4.2
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Specific
Duties.
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14
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4.3
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General
Partners - Devotion of Time to Partnership.
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14
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4.4
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Voting
Rights of General Partners.
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14
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4.5
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General
Partners Engaging in Other Business.
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14
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ARTICLE
V
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15
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RESTRICTIONS
ON TRANSFERS OF PARTNERSHIP INTERESTS;
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15
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REMOVAL
OF PARTNERS
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15
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5.1
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Prohibition
Against Transfer.
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15
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5.2
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Right
of First Refusal
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15
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5.3
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Death
of a Partner.
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16
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5.4
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Removal
of General Partner.
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16
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5.5
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Valuation
of Interest
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17
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5.6
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Payment
of Purchase Price
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17
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5.7
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Partnership
Assumption of Liabilities
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18
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5.8
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Covenant
Against Dissolution.
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18
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ARTICLE
VI
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18
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DISSOLUTION
OF THE PARTNERSHIP
|
18
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6.1
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Dissolution
and Winding Up.
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18
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6.2
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Dissolution
Upon Consent.
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18
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6.3
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Dissolution
Pursuant to California Corporations Code
|
|||
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Section
15031(3) and 15031(5).
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18
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6.4
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Dissolution
Upon Sale or Disposition.
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19
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6.5
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Dissolution
Upon Judicial Decree.
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19
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6.6
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Responsibility
for Winding Up.
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19
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6.7
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Liquidation
and Distribution.
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19
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6.8
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Negative
Capital Accounts.
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19
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6.9
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Filing
Certificate of Dissolution.
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19
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2
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ARTICLE
VII
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19
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PARTNERSHIP
MEETINGS
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19
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7.1
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Call
and Place of Meetings.
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19
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7.2
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Notice
of Meeting.
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20
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7.3
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Quorum.
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20
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7.4
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Adjournment
of Meetings.
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20
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7.5
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Meetings
Not Duly Called, Noticed, or Held.
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20
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7.6
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Waiver
of Notice.
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21
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7.7
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Consent
to Action Without Meeting.
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21
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7.8
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Proxies.
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21
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ARTICLE
VIII
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22
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|||
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MISCELLANEOUS
CLAUSES AND REPRESENTATIONS
|
22
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8.1
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Arbitration;
Valuation of Interest.
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22
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8.2
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DISPUTE
RESOLUTION.
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24
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8.3
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Amendments.
|
25
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8.4
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Indemnification
|
25
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8.5
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Notices.
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26
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8.6
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Governing
Law.
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26
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8.7
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Binding
on Heirs and Successors.
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26
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8.8
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Counterparts.
|
26
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8.9
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Attorneys'
Fees.
|
26
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8.10
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Coordination
with Uniform Partnership Act.
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27
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8.11
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Section
754 Election.
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27
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3
THIS
AGREEMENT is made and entered into by and between J.R. ▇▇▇▇▇▇ & ASSOCIATES,
INC., a California corporation (“JRC”), with address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and SOLAR POWER INTEGRATORS, COMMERCIAL,
INC., a California corporation (“SPIC”), with address at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, each of whom has executed
the
original or a counterpart of this Agreement.
In
consideration of the mutual covenants and conditions contained herein, it
is
hereby agreed by and between the parties as follows:
ARTICLE
I
NATURE
OF PARTNERSHIP
1.1
Formation
of General Partnership.
JRC and
SPIC hereby form a General Partnership (hereinafter referred to as "the
Partnership") pursuant to the provisions of Chapter 1, Title 2 of the
Corporations Code of the State of California, known as the "Uniform Partnership
Act" of California.
1.2 Name
of Partnership.
The
Partnership name shall be SOLAR POWER INTEGRATORS, a California General
Partnership.
1.3 Purpose
of Partnership.
The
purpose of the Partnership shall be the sales, design and installation of
solar
systems. The Partnership may engage in any other lawful business as from
time to
time may be deemed advisable or proper by a majority vote of the General
Partners.
1.4 Principal
Place of Business.
The
principal place of business of the Partnership shall be ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place or places
within
California as may be determined from time to time by a majority vote of the
General Partners.
1.5 Term.
The
Partnership shall commence on execution of this Partnership Agreement and
shall
continue for a period of thirty (30) years unless sooner dissolved, as
hereinafter provided.
1
1.6 Statement
of Partnership and Fictitious Business Name Statement.
The
Managing Partner shall (concurrently with the execution of this Agreement)
sign
and acknowledge a Statement of Partnership pursuant to the provisions of
Section
15010.5 of the Corporations Code of the State of California. Such Statement
shall be filed for record in the Office of the Recorder for the county in
which
the principal place of business of the Partnership is situated, and in the
Office of the Recorder of each county in which the Partnership shall have
a
place of business or in which real property it owns shall be
situated.
In
addition, the General Partners shall file and publish a Statement of Fictitious
Business Name as required by Sections 17900 through 17930 of the California
Business and Professions Code and any other notices, certificates, statements
or
other instruments required by any provision of any law of the United States
or
any state or other jurisdiction which may govern the formation of a Partnership
or the conduct of its business from time to time.
1.7 Definitions.
As used
herein, the following terms shall have the respective meanings
indicated:
A. "Additional
Capital" shall mean the amount of cash which may be required to be contributed
from time to time by the General Partners for the purposes of paying the
expenses of the Partnership including (without limitation) debt service,
property taxes, insurance, development and improvement costs, contributions,
litigation expenses, engineering fees, accounting fees, attorneys' fees,
architectural fees, fees for building permits, impact fees, and other ordinary
and usual expenses incurred in connection with the development of property
of a
similar type and character to the Property.
B. "Affiliate"
shall mean any individual, partnership, corporation, trust or other entity
or
association, directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with the Member. the
term
“control,” as used in the immediately preceding sentence, means, with respect to
a corporation or limited liability company, the right to exercise, directly
or
indirectly, more than fifty percent (50%) of the voting rights attributable
to
the controlled corporation or limited liability company, and, with respect
to
any individual, partnership, trust, other entity or association, the possession,
directly or indirectly, of the power to direct or cause the direction of
the
management or policies of the controlled entity.
C. "Agreement"
shall refer to this Partnership Agreement.
2
D. "Breaching
Partner" shall refer to any Partner who fails to pay his share of Additional
Capital within ninety (90) days after delivery of the Call Notice pursuant
to
Section 3.2.C or who otherwise materially breaches this
Agreement.
E. "Call
Notice" shall refer to the written notice calling for Additional Capital
as
provided in Section 3.2.
F. “Claims”
is defined in Section 8.4.
G. "Contractor’s
License" shall refer to JRC’s contractor’s license issued by the Contractors
State License Board of California as provided in Section 3.1.
H. "Defaulting
Partner" shall refer to a Partner who fails to contribute his share of
Additional Capital within ten (10) days after delivery of the Call Notice
but
who does contribute his share of Additional Capital within ninety (90) days
after the delivery of the Call Notice.
I.
"General
Partners" and/or "Partners" shall collectively refer to JRC and SPIC, and
to any
duly admitted Substituted Partner. Reference to "General Partner" or "Partner"
shall be to any one of the General Partners.
J.
“Indemnitee
Party” is defined in Section 8.4.
K. “Indemnitee
Parties” is defined in Section 8.4.
L. "Initial
Capital" shall mean the capital required to be contributed pursuant to Section
3.1.
M.
"Managing
Partner" shall refer to JRC.
N. "Net
Cash" shall mean the actual cash and marketable securities held by the
Partnership at the end of each accounting period less reasonable reserves
in
amounts determined by the Managing Partner.
O. "New
Partner" shall refer to a Partner who is admitted as a Substituted Partner
in
order to raise the Additional Capital which was not contributed by a Breaching
Partner pursuant to Section 3.2.G(2).
P. "Non-Breaching
Partner" shall refer to those Partners who are not in breach of this
Agreement.
Q. "Non-Defaulting
Partner" shall refer to the Partners who have timely contributed their share
of
Additional Capital under Section 3.2.
R. "Non-Selling
Partners" shall refer to all of the Partners other than the Selling
Partner.
S. "Partnership"
shall refer to the General Partnership created under this Partnership
Agreement.
3
T. "Partnership
Interest" shall refer to the property rights (as more fully defined in Sections
15024, 15025 and 15026 of the California Corporations Code) of a Partner
consisting of:
|
1.
|
His
rights in specific Partnership
property;
|
|
2.
|
His
interest in the Partnership; and’
|
|
3.
|
His
right to participate in management.
|
U. "Percentage
Interest" shall mean the percentage of profits and losses generally allocated
to
each Partner pursuant to Section 3.4.
V.
“Sales
Notice” is defined in Section 5.2.
W.
"Selling
Partner" shall mean a Partner who desires to sell all or a portion of his
interest in the Partnership pursuant to Section 5.2.
X. “Solar
Contract” shall refer to any agreement entered into between a customer and the
Partnership for the design, engineering, supply or installation of a solar
system.
Y. "Substituted
Partner" shall refer to a transferee of any Partner who is admitted as a
Partner
with full voting and other rights and duties pursuant to Section
2.2.
Z. "SuperMajority"
shall refer to more than 66 2/3% of the Percentage Interest.
ARTICLE
II
ADMISSION
OF PARTNERS; MANAGING PARTNER
2.1
Members
of Partnerships.
The
members of the Partnership shall consist of the Partners named in the
introductory paragraph of this Agreement and all Substituted
Partners.
2.2 Admission
of a Substituted Partner.
A. Subject
to Article V, after the formation of the Partnership a person may be admitted
as
a Substituted Partner upon execution of a counterpart of this Agreement and
on
the recording of an amendment to the Statement of Partnership, provided that
the
following conditions are satisfied:
1. The
written consent of all the General Partners must be first obtained;
and
2. Filing
fees and a transfer fee of Five Hundred Dollars ($500) for accounting, legal,
and other professional fees must be paid by the newly admitted
Partner.
4
B. The
Managing Partner shall specify the effective date that any transferee is
admitted as a Substitute Partner. From and after the effective date the rights,
duties and obligations of the transferor Partner shall terminate and the
rights,
duties and obligations of the Substituted Partner shall commence with respect
to
the Partnership Interest so transferred.
2.3 Assignee
Partner.
If a
General Partner transfers all or a part of his Partnership Interest in
accordance with Article V, and if the transferee is not admitted as a Substitute
Partner, then the transferee shall be a mere assignee of the General Partner's
Partnership Interest and shall have only the right to receive the current
and
liquidating profits to which the assigning General Partner was entitled in
accordance with Section 15027 of the California Corporations Code. An Assignee
shall not have any right to specific partnership property or any right to
participate in management. The Assignee, by accepting the assignment shall
have
the obligation to contribute Additional Capital on the same terms as required
by
the assigning General Partner pursuant to Section 3.2 hereof and agrees to
be
bound by all of the terms and conditions of that section. Any General Partner
who transfers his interest by assignment shall not be relieved of any
obligations or duties, nor shall be deprived of any rights, under this
Agreement.
2.4 Managing
Partner.
The
Managing Partner shall be JRC.
ARTICLE
III
FINANCIAL
3.1 Initial
Capital Contributions.
A. The
Initial Capital of the Partnership shall be contributed by the Partners as
follows:
|
Name
|
Description
|
Value
|
|||||
|
J.R.
▇▇▇▇▇▇ & Associates
|
Cash
|
$
|
25,500
|
||||
|
Solar
Power Integrators, Commercial, Inc.
|
Cash
|
$
|
24,500
|
||||
|
TOTAL
|
$
|
50,000
|
|||||
B. JRC’s
Percentage Interest shall be fifty-one percent (51%) unless adjusted as provided
in Section 3.2.H or unless such Partner transfers all or part of his Partnership
Interest in accordance with Article V.
5
C. SPIC’s
Percentage Interest shall be forty-nine percent (49%) unless adjusted as
provided in Section 3.2.H or unless such Partner transfers all or part of
his
Partnership Interest in accordance with Article V.
D. SPIC
shall license on a non-exclusive basis the right to utilize the trademarks
and
trade names of “Solar Power” and any derivatives thereof, which trademarks and
trade names shall remain the exclusive intellectual property of SPIC. The
license shall be for the duration of the Partnership without further
compensation to SPIC.
E. ▇▇▇▇▇
▇.
▇▇▇▇▇▇ is a contractor licensed under the Contractors State License Board
of
California, License # ___________. The Partnership shall employ ▇▇▇▇▇ ▇.
▇▇▇▇▇▇
as the responsible employee, provided the Partnership indemnifies, defends,
and
holds ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ harmless from any and all Claims, as set forth in Section
8.4, below.
3.2 Loans
to Partnership.
No
Partner shall lend or advance money to or for the Partnership's benefit without
the approval of the Managing Partner. If any Partner lends any money to the
Partnership in addition to his, her, or its contribution to Partnership's
capital, the loan shall be a debt of the Partnership to that Partner and
shall
bear interest at a mutually agreed rate. The liability shall not be regarded
as
an increase of the lending Partner's capital, and it shall not entitle him,
her
or it to any increased share of the Partnership's profits. Notwithstanding,
the
Partners hereby agree and acknowledge that SPIC shall advance money to the
Partnership in an amount not to exceed Two Hundred and Fifty Thousand Dollars
($250,000) (the “Line of Credit”). The Line of Credit shall bear interest at a
rate equal to the greater of i) eight percent (8%) simple interest; or ii)
the
prime rate published by the Wall Street Journal on the last day of each month
for the following month, per year. Such interest shall be paid in accordance
with the terms of a promissory note to be executed by and between SPIC and
the
Partnership (the “Note”).
3.3 Additional
Capital Contributions.
A. To
the
extent that Partnership revenues, Initial Capital Contributions, and Line
of
Credit are insufficient to meet all of the obligations and capital requirements
of the Partnership, the Managing Partner may reasonably determine the amount
of
Additional Capital required by the Partnership and may require each Partner
to
contribute a proportionate share of Additional Capital to the Partnership.
The
Managing General Partner's determination will be binding on all Partners
unless
overridden by majority vote of all Partners.
6
B. Each
Partner's proportionate share of Additional Capital shall be defined as the
product of the total amount of Additional Capital required by the Partnership
multiplied by that Partner's Percentage Interest in the
Partnership.
C. All
Additional Capital contributions shall be made in cash by each Partner to
the
Partnership within ten (10) days after delivery of the Call Notice.
D. If
any
Partner fails to contribute his share of Additional Capital within ten (10)
days
after the Call Notice, then that Partner shall be a Defaulting
Partner.
E. A
Defaulting Partner shall have ninety (90) days from the date of delivery
of the
Call Notice in which to cure that default by contributing his share of the
Additional Capital and by paying to the Non-Defaulting Partners, (in proportion
to their Percentage Interests) an amount equal to one percent (1%) of the
Defaulting Partner's share of Additional Capital as "Liquidated Damages"
for
each ten (10) day period that he is late in contributing his share of the
Additional Capital commencing on the eleventh (11th) day after delivery of
the
Call Notice. For example, if the Defaulting Partner's share of Additional
Capital is Five Hundred Thousand Dollars ($500,000) and he is thirty (30)
days
late, he would pay the sum of three percent (3%) of Five Hundred Thousand
Dollars ($500,000) or Fifteen Thousand Dollars ($15,000) as liquidated damages
equally to the Non- Defaulting Partners.
BY
INITIALING HEREUNDER, EACH PARTNER SPECIFICALLY AGREES TO PAY ANY SUCH
LIQUIDATED DAMAGES WHICH MAY BECOME DUE AS A RESULT OF HIS LATE PAYMENT OF
ADDITIONAL CAPITAL CONTRIBUTION AND FURTHER AGREES THAT THESE DAMAGES CONSTITUTE
A REASONABLE ESTIMATE OF THE AMOUNT OF ACTUAL DAMAGES WHICH MAY BE SUFFERED
BY
THE OTHER PARTNERS AS THE RESULT OF LATE PAYMENT:
|
Initials:
|
____________
|
____________
|
|
JRC
|
SPIC
|
F. If
any
Defaulting Partner fails to cure a default within ninety (90) days by
contributing his share of Additional Capital and by paying the liquidated
damages as above provided, then such Partner shall be in material breach
of this
Agreement (hereinafter "Breaching Partner").
7
G. The
Non-Breaching Partners by majority vote may elect any one of the following
alternative remedies: (i) contribute the Breaching Partner's share of Additional
Capital; (ii) admit a New Partner who contributes an amount equal to the
Additional Capital required to be contributed by the Breaching Partner; (iii)
loan an amount equal to the Additional Capital required to be contributed
by the
Breaching Partner; (iv) remove the Breaching Partner as provided in Section
5.5
and ▇▇▇ him for damages in a breach of contract action which the Partners
agree
may be initiated independently of a dissolution action; or (v) dissolve the
Partnership and seek damages against the Breaching Partner for his breach
of the
Partnership Agreement including, without limitation, the right to damages
for
out of pocket costs and consequential damages such as lost profits. An election
of remedies once made shall be irrevocable and shall be made after ninety
(90)
days and before one hundred twenty (120) days after delivery of the Call
Notice.
An election of remedies with respect to one breach shall not be binding on
any
election regarding any subsequent breach.
H. If
the
Non-Breaching Partners make the election provided in Section 3.2.G(1), the
Non-Breaching Partners may contribute the Breaching Partner's share of
Additional Capital in proportion of their Percentage Interests, or in any
other
proportions that they may, by agreement, determine and the allocation of
profits
and losses pursuant to Section 3.4.A shall be adjusted so that income,
gain, loss, deduction, and/or credit shall thereafter be allocated in proportion
to the total capital contributions of each Partner. For example, if the total
capital contribution of each Partner is Ten Million Dollars ($10,000,000)
for a
total of Forty Million Dollars ($40,000,000) and the Managing Partner calls
for
Additional Capital of Four Million Dollars ($4,000,000), (One Million Dollars
($1,000,000) for each Partner) and if one Partner fails to contribute One
Million Dollars ($1,000,000) within ninety (90) days, then the Non-Breaching
Partners may elect to contribute the additional One Million Dollars ($1,000,000)
in equal shares in which case their Percentage Interests would be increased
from
twenty-five percent (25%) each to twenty-five and seven hundred fifty-eight
thousandths percent (25.758%) and the Breaching Partner's Percentage Interest
would be decreased from twenty-five percent (25%) to twenty-two and seven
hundred twenty-six thousandths percent (22.726%).
10/11
x
25% ÷ 3 = Percentage Increase of Non-Breaching Partners
8
I. If
the
Non-Breaching Partners do not elect to contribute Additional Capital of the
Breaching Partner, but rather elect to admit a New Partner to the Partnership,
then the New Partner shall become a Substituted Partner as provided in Section
2.1. The New Partner shall be entitled to receive a Percentage Interest and
a
Partnership Interest in the Partnership equal to the percentage derived by
multiplying the Breaching Partner's Percentage Interest by a fraction of
the
numerator of which is equal to the Additional Capital required to be contributed
by the Breaching Partner and the denominator of which is equal to the sum
of the
total capital contributed by the Breaching Partner plus the amount of Additional
Capital required to be contributed by the Breaching Partner.
J. In
lieu
of contributing the Additional Capital of a Breaching Partner and in lieu
of
admitting a New Partner, the Non-Breaching Partners may loan an amount equal
to
the assessment in default pursuant to Section 3.9.A below.
K. All
liquidated damages which may accrue pursuant to Section 3.2.E, above, shall
be a
personal obligation of the Breaching Partner to the other Partners and shall
be
payable on demand and shall survive any election made by the Non-Breaching
Partners to cure the breach by the Breaching Partner pursuant to Section
3.2.G.
The accrual of liquidated damages shall cease after ninety (90) days of
default.
L. So
long
as a Partner is in default or breach hereunder, he shall have no voting rights
but shall receive notice of any meetings.
3.4 Interest
on Capital and Income Accounts.
No
Partner shall receive any interest on his capital account.
3.5 Allocation
of Profits and Losses.
A. Except
as
provided in Section 3.4.B, all income, gain, loss, deduction, or credit shall
be
allocated to the Partners in proportion to their respective Percentage Interests
in the Partnership.
B. If
a
difference exists between the fair market value of the property contributed
by
any Partner to the Partnership and its adjusted basis, then gain, loss and
depreciation shall be allocated among the Partners pursuant to Section 704(c)(2)
of the Internal Revenue Code of 1986, and Section 17857(b) of the California
Revenue and Taxation Code to take account of the variation between the basis
of
the Property in the Partnership and its fair market value at the time of
contribution.
9
3.6 Computation
of Profits and Losses.
Profits
and losses shall be determined on an accrual method of accounting with the
application of generally accepted accounting principles. Profits and losses
shall be computed quarterly.
3.7 Required
Current Distributions of Net Cash.
The
Partnership shall distribute so much of the Partnership's Net Cash as may
be
necessary to equal the product derived by multiplying the Partnership's net
profit by thirty-five percent (35%). Net Cash shall be distributed to the
Partners in convenient intervals but not less frequently than annually in
proportion to their Percentage Interests in the Partnership.
3.8 Discretionary
Distribution of Net Cash.
In the
event that the Managing Partner determines that the Partnership has Net Cash
which is available for distribution (including, without limitation, cash
generated by the sale or refinancing of Partnership property), the Managing
Partner may distribute said Net Cash in the same proportions as above
provided.
3.9 Repayment
of Loans and Liquidated Damage.
Notwithstanding any provision of this Agreement, the Managing Partner shall
repay all loans made by any Partner pursuant to the terms of this Agreement
before distributing any Net Cash to the Partners. The Managing Partner is
also
specifically authorized to withhold from any distribution to a Defaulting
Partner or Breaching Partner an amount equal to any liquidated damages under
Section 3.2.E and pay such liquidated damages over to the Non-Defaulting
Partners as their interests may appear. The Managing Partner is also authorized
to withhold distributions from any Partner who is in default or has breached
this Agreement until all assessments for Additional Capital attributable
to such
Partner are current.
3.10 Loans
by Partners; Default Capital Contribution.
A. If
any
Partner is in default in contributing his share of Additional Capital pursuant
to Section 3.2, then the Non-Defaulting Partners may loan the funds to the
Partnership necessary to cure the assessment in default. Any such loan shall
bear an interest rate in an amount equal to five (5) points above the Federal
Discount Rate and shall be payable on one hundred eighty (180) days
demand.
B. In
addition, the Managing Partner (or any other Partner with the approval of
the
Managing Partner) may from time to time loan funds to the Partnership as
may be
reasonable or necessary and which shall be repaid with interest at the rate
of
ten percent (10%) upon thirty (30) days demand.
10
3.11
Other
Distributions and Compensation to Partners and/or Affiliates.
Apart
from their share of profits and losses and distributions of cash as described
above, the Partners and their affiliates shall receive no distribution or
compensation from the Partnership except as follows:
A. The
Managing Partner shall, in addition to his share of the profits and losses
of
the Partnership, receive cash reimbursements as may, from time to time, be
approved by unanimous vote of all Partners in order to defray any general
office
and additional expenses incurred by the Managing Partner in the administration
of his duties. Any request by the Managing Partner for cash reimbursements
pursuant to this section shall be supported by reasonably adequate accounting
records prepared by a certified public accountant.
B. If
any
Partner or Affiliate also performs services for the Partnership as an employee
or as an independent contractor thereof, he shall be compensated for such
services at the same rate of compensation which, according to the standard
in
the community, would be paid to an independent party for performing the same
or
similar services if approved by majority vote of the Partners.
C. Each
Partner shall be entitled to reimbursement for all verified and authorized
expenses incurred by him in connection with the Partnership business. All
such
expenses shall be authorized by the Managing Partner or if payable to the
Managing Partner, by majority vote.
3.12
Maintenance
of Books of Account.
At all
times the Managing Partner shall maintain or cause to be maintained true
and
proper books of account.
3.13 Location
of Books of Account.
All
books of account, together with this Agreement and Statement of Partnership
and
any amendments thereto, shall at all times be kept and maintained at the
principal place of business of this Partnership.
3.14 Inspection
of Books of Account.
All
books of account shall be open to inspection by any Partner or his duly
authorized representative, on reasonable notice, at any reasonable time during
business hours, for any purpose reasonably relating to his interest as a
Partner, and said Partner or representative shall have the further right
to make
copies or excerpts therefrom.
3.15 Method
of Accounting.
The
Partnership books shall be kept on the accrual method of
accounting.
3.16 Fiscal
Year.
The
fiscal year of the Partnership shall be the calendar year.
3.17 Capital
Accounts.
An
individual capital account shall be maintained for each Partner in accordance
with generally accepted accounting principles and in accordance with the
regulations promulgated pursuant to Section 704 of the Internal Revenue Service
Code of 1986.
11
3.18 Financial
Statements and Interim Reports.
The
books shall be closed and balanced at the end of each fiscal year and there
shall be delivered to each Partner within ninety (90) days after the expiration
of each fiscal year of this Partnership, a balance sheet and a profit and
loss
statement, together with a statement showing the accounts of each Partner,
the
distributions to each Partner, and each Partner's share of profits or loss
of
the Partnership for such year reportable for state and federal tax
purposes.
A. Within
thirty (30) days after the close of each calendar quarter, the Managing Partner
shall prepare and deliver to each Partner interim income and expense statements
and balance sheets.
3.19 Banking.
The
Managing Partner shall open and thereafter maintain a separate bank account
in
the name of the Partnership, in which there shall be deposited all of the
funds
of the Partnership. No other funds shall be deposited in the account. The
funds
in said account shall be used solely for the business of the Partnership,
and
all withdrawals therefrom are to be made on checks signed by Managing
Partner.
ARTICLE
IV
RIGHTS,
POWERS, DUTIES, AND RESTRICTIONS OF PARTNERS
4.1
Managing
Partner.
A. The
Managing Partner shall have general supervision, direction and control of
the
Partnership. The Managing Partner will manage and conduct the day-to-day
affairs
of the Partnership. The Managing Partner shall have the general powers and
duties of management typically vested in the office of the president or chief
executive officer of the corporation, and the treasurer. Unless otherwise
provided by this Agreement, the Managing Partner shall have full, complete,
and
exclusive authority and discretion to make all decision affecting the business
of the partnership, including but not limited to the following:
1. Borrow
money on behalf of the Partnership or offer as security for any debt the
Partnership assets, if any, in the ordinary course of business;
2. Collect
all sums due to and pay all obligations due by the Partnership;
3. Employ
agents, employees, managers, accountants, attorneys consultants, an other
persons as may be necessary;
12
4. Pay
all
taxes, charges, assessments and just debts of the Partnership;
5. Enter
into contracts on behalf of the Company;
6. Make
tax
elections as may be necessary or desirable in its judgment, compromise and
settle obligations, litigation or claims against the Partnership;
7. Engage
in
arbitration or litigation;
8. Create
reserves and withdraw funds therefrom;
9. Execute
documents on behalf of the Partnership; and
10.
Exercise
any and all other powers usual and necessary to carry on all of the business
affairs of the Partnership;
B. In
performing his duties, the Managing Partner shall not perform and of the
following acts without a Supermajority consent of the Partners:
1. Any
act
that would make it impossible to carry on the ordinary business of the
Partnership;
2. A
confession of judgment against the Partnership;
3. Unless
otherwise provided by this Agreement, a dissolution of the
Partnership;
4. Change
the nature of the principal business of the Partnership;
5. File
a
petition in bankruptcy or enter into an arrangement among
creditors;
6. Enter
into any transaction constituting a “reorganization;”
7. Merge
with another entity;
8. Continue
to the business of the Partnership after a Dissolution Event;
9. Acquire
or dispose of any real or personal property or interest therein in excess
of
Fifty Thousand Dollars ($50,000) on behalf of the Partnership;
10. Borrow
money on behalf of the Partnership or offer as security for any debt the
Partnership assets, if any, not in the ordinary course of business;
11. Sell,
exchange and convey all or any of the Partnership assets;
12. Execute
on behalf of the Partnership any contract or other agreement which would
obligate the Partnership to pay in excess of Fifty Thousand Dollars ($50,000);
or
13
13. Lease
any
property owned by the Partnership.
4.2 Specific
Duties.
A. JRC’s
Duties.
In
addition to its duties as Managing Partner, JRC shall also be responsible
for
(i) all marketing and sales efforts; (ii) establishing and maintaining customer
relationships; (iii) contract management; and (iv) coordinating job scheduling
in cooperation with SPIC.
B. SPIC’s
Duties.
SPIC
shall be responsible for (i) exclusively supplying all solar panels or other
solar materials to the Partnership for installation; (ii) the design,
engineering, and installation of all solar systems for customers; and (iii)
coordinating job scheduling in cooperation with JRC.
C. Joint
Duties.
As a
condition to the Partnership’s acceptance of a Solar Contract from any customer,
JRC and SPIC must agree on the amount that SPIC, as an independent contractor,
will charge the Partnership for the design, engineering, supply and installation
services that SPIC will provide to the Partnership. If the Partners fail
to
agree on the cost of SPIC’s services related to any Solar Contract, then the
Partnership shall reject the particular Solar Contract and each Partner shall
thereafter be prohibited from individually performing any work for that
customer, which was the subject of the rejected Solar Contract.
4.3 General
Partners - Devotion of Time to Partnership.
Each
Partner shall devote such time to this Partnership as may be reasonably
requested by the Managing Partner in order to conduct this Partnership in
an
efficient and businesslike manner.
4.4 Voting
Rights of General Partners.
All
Partnership matters shall be decided by a majority vote with each Partner
having
one vote for each one (1) point of his Percentage Interest. For example,
a
Partner owning a twenty-five percent (25%) Percentage Interest shall have
twenty-five (25) votes.
4.5 General
Partners Engaging in Other Business.
Any
of
the Partners may engage in or possess an interest in other business ventures
of
every nature and description independently or with others, including, but
not
limited to, the acquisition of a venture similar, identical or competitive
with
the business of the Partnership; and neither the Partnership nor the Partners
shall have any right by virtue of this Agreement or any fiduciary or other
similar duty which may arise by reason of this relation or Partnership in
and to
such independent ventures or to the income or profits derived therefrom.
Each
Partner hereby waives any and all claims or actions which may heretofore
have
arisen, or which may hereafter arise against any other Partner as a result
of
engaging in transactions or activities competitive with the Partnership
business.
14
ARTICLE
V
RESTRICTIONS
ON TRANSFERS OF PARTNERSHIP INTERESTS;
REMOVAL
OF PARTNERS
5.1 Prohibition
Against Transfer.
Neither
a Partner, nor his heirs, personal representatives, successors, or assigns,
shall have the right, at any time, to sell, transfer, assign, or hypothecate,
for consideration or gratuitously, during life or after death, all or any
portion of his Partnership Interest and any such attempted sale, transfer,
assignment or hypothecation shall be void and ineffectual unless the
requirements of this Article V have first been satisfied.
5.2 Right
of First Refusal
A. If
any
Partner desires to sell, assign, transfer or hypothecate his Partnership
Interest during his life, he shall first deliver a notice in writing to the
Managing Partner ("Sales Notice"), stating the price, terms, and conditions
of
any offer received; or, if no bona fide offer has been received, the price,
terms and conditions upon which he would be willing to sell his Partnership
Interest to the Non-Selling Partners. The Selling Partner shall also disclose
all facts relevant to the proposed sale as may be requested by the Non-Selling
Partners.
B. Within
thirty (30) days after receipt of the Sales Notice, the Non-Selling Partners
shall have the right to purchase all of the Partnership Interest offered
by the
Selling Partner as follows:
1. In
the
case of a bona fide offer the purchase price and terms and conditions of
the
sale shall be as set forth in the Sale Notice; or
2. In
any
other case the purchase price shall be the fair value (as determined in Section
5.5) of the Selling Partner's Partnership Interest as determined by agreement
of
the Partners within thirty (30) days after delivery of the Sales Notice,
or if
they fail to so agree within thirty (30) days, by binding arbitration pursuant
to Section 8.1. The terms of payment shall be all cash at closing.
15
C. If
there
is more than one Non-Selling Partner, each Non-Selling Partner shall be entitled
to purchase a portion of the Selling Partner's Partnership Interest in the
same
proportion as his Percentage Interest bears to the Percentage Interests of
all
Non-Selling Partners. If one or more Non-Selling Partners decide not to purchase
his proportionate share(s) of the Selling Partner's Partnership Interest,
the
other Non-Selling Partners may purchase their proportionate shares
thereof.
D. If
Non-Selling Partners fail to purchase all, and not less than all, of the
Selling
Partner's Partnership Interest specified in the Sales Notice within thirty
(30)
days after delivery of the Sales Notice, the Selling Partner may assign his
interest to anyone on the same terms and conditions stated in the Sales Notice
and on no more favorable terms or conditions; provided, however, that if
said
interest is not assigned within one hundred (100) days after the delivery
of the
Sales Notice, then the transfer of the Selling Partner's Partnership Interest
shall again become subject to the Non-Selling Partner's Right of First Refusal.
Any person to whom a Partnership Interest is assigned pursuant to this Section
5.2.D shall be an Assignee Partner unless the Non-Selling Partners vote to
make
him a Substituted Partner pursuant to Section 2.2.
5.3 Death
of a Partner.
Upon the
death of a Partner, the Partnership shall admit the deceased Partner's personal
representative, heirs, or devisees as a Substituted Partner and the business
of
the Partnership shall continue without interruption unless the Remaining
Partners elect to remove the personal representative, heir or devisee as
a
Partner pursuant to Section 5.4, below.
5.4 Removal
of General Partner.
A. Any
Partner may be removed by a unanimous vote of the other Partners (herein
"Remaining Partners"), so long as the Partnership and/or the Remaining Partners
purchase the Removed Partner's Partnership Interest at fair value, as determined
in accordance with Section 5.5.
B. For
purposes of Section 5.4.A, the Removed Partner shall receive from the
Partnership or the Remaining Partners, as the case may be, the value of his
Partnership Interest, determined by agreement between the Removed Partner
and
the Remaining Partners in accordance with Section 5.5, or if they cannot
agree
within thirty (30) days after the effective date of the removal, then by
binding
arbitration as provided in Section 8.1, and payment shall be made in cash
no
later than the sixtieth (60th) day after the valuation determination of the
Removed Partner's interest by agreement or by arbitration, as the case may
be.
16
C. The
issue
of removal shall be voted on at a duly noticed Partnership meeting and shall
be
effective upon delivery of written notice of the removal to the Removed
Partner.
D. The
Removed Partner's right to participate in Partnership affairs and profits
and
losses shall be terminated on the effective date of the removal even though
payment of the purchase price will be delayed until the value of the Removed
Partner's Partnership Interest is determined. If the Remaining Partners fail
to
pay the purchase price within the time periods herein set forth, the Removed
Partner's sole remedy will be to ▇▇▇ for breach of contract and he shall
not be
entitled to rescind the removal.
E. In
the
event a Partner is removed for materially breaching this Agreement, the
Remaining Partners may withhold up to twenty percent (20%) of the purchase
price
by depositing it in a blocked account provided the Remaining Partners
simultaneously institute and diligently prosecute a clause for damages against
the Removed Partner. The funds in any such blocked account shall be disbursed
only upon a judgment or settlement between the Removed Partner and the Remaining
Partners.
5.5 Valuation
of Interest.
Except
as otherwise provided, the value of a Partner's interest in the Partnership
for
purposes of this Agreement shall be the sum of the following items as of
the
date the value is to be determined after the accounting records have been
closed
under the Partnership's accounting practices, consistently applied:
A. The
credit balance in the Partner's capital account;
B. The
credit or debit balance in the Partner's drawing account;
C. The
amount of any debt owed to the Partner by the Partnership;
D. The
Partner's proportionate share of the Partnership's net profit for the current
fiscal year to the date as of which the computation is made and not yet
reflected in the Partner's capital or drawing account; or, if the Partnership
operations for that period show a loss, the Partner's proportionate share
of any
such loss shall be deducted; and
E. Any
other
sums due the Partner from the Partnership; but
F. Less
any
debt owed by the Partner to the Partnership.
5.6 Payment
of Purchase Price.
Except
as otherwise provided, whenever the Partnership is obligated or, having the
right to do so, chooses to purchase a Partner's interest, it shall pay for
the
interest in cash within ninety (90) days after the date on which the
Partnership's obligation to pay has become fixed.
17
5.7 Partnership
Assumption of Liabilities.
Except
as otherwise provided, the continuing Partnership shall pay, as they mature,
all
Partnership obligations and liabilities that exist on the effective date
of
termination and shall save the terminating Partner harmless from any action
or
claim arising or alleged to arise from those obligations or from liabilities
accruing after that date.
5.8 Covenant
Against Dissolution.
Except
as provided herein, no Partner shall have the right to voluntarily dissolve
this
Partnership unless all Partners agree thereto. Any Partner who desires to
withdraw from the Partnership shall follow the procedure set forth in this
Article V.
ARTICLE
VI
DISSOLUTION
OF THE PARTNERSHIP
6.1 Dissolution
and Winding Up.
The
Partnership shall be dissolved and its affairs shall be wound up upon the
expiration of the term provided in Section 1.5, or upon the occurrence of
any of
the events specified in Sections 6.2 through 6.5, whichever is the first
to
occur.
6.2 Dissolution
Upon Consent.
The
Partnership shall be dissolved upon any date specified in any consent to
dissolution signed by all of the Partners.
6.3 Dissolution
Pursuant to California Corporations Code Section 15031(3) and
15031(5).
The
Partnership shall dissolve, its assets sold, and its affairs shall be wound
up
upon occurrence of the events set forth in California Corporations Code Section
15031(5) unless the other Partners unanimously vote to continue the Partnership,
and purchase the interest of the "Bankrupt Partner." The Bankrupt Partner
shall
be treated as serving a Sales Notice (other than in connection with a bona
fide
offer) upon the Non-Selling Partners as provided in Section 5.2 upon filing
of a
petition for bankruptcy or reorganization and the Bankrupt Partner shall
thereupon become a Selling Partner. The Non-Selling Partners shall have the
right to purchase the Selling Partner's Percentage Interest as provided in
Section 5.2. The Partnership shall dissolve, the assets sold and its affairs
wound up upon the occurrence of any event described in California Corporations
Code Section 15031(3).
18
6.4 Dissolution
Upon Sale or Disposition.
The
Partnership shall be dissolved and its affairs shall be wound up when all
of its
assets have been disposed of or sold.
6.5 Dissolution
Upon Judicial Decree.
The
Partnership shall be dissolved and its affairs shall be wound up when required
by a decree of judicial dissolution.
6.6 Responsibility
for Winding Up.
Upon
dissolution of the Partnership, the affairs of the Partnership shall be wound
up
by the Managing Partner, or if he has wrongfully caused the dissolution,
then by
those Partners who have not wrongfully caused the dissolution.
6.7 Liquidation
and Distribution.
The
person or persons responsible for winding up the affairs of the Partnership
pursuant to Section 6.6 shall take full account of the Partnership assets
and
liabilities, shall liquidate the assets of the Partnership as promptly as
is
consistent with obtaining the fair value thereof, and shall apply and distribute
the proceeds in the following order:
A. To
creditors of the Partnership other than Partners; and
B. To
the
Partners as creditors.
C. To
the
Partners in accordance with their capital accounts.
6.8 Negative
Capital Accounts.
If after
all the assets of the Partnership have been sold, any Partner has a negative
capital account, that Partners shall pay to the Partnership in cash within
ninety (90) days thereafter, an amount equal to the negative balance in his
capital account. The amount so repaid shall be distributed among the Partners
who have positive balances in their capital accounts. If any Partners fail
to
contribute an amount equal to the negative balance in his capital account
within
ninety (90) days, the amount due to the Partnership shall accrue interest
from
date first due at the maximum rate chargeable under California Law and the
interest shall continue to accrue on the outstanding balance due until the
negative balance is paid in full. All interest so accruing shall be distributed
to the Partners with positive capital account balances in proportion
thereto.
6.9 Filing
Certificate of Dissolution.
Upon
dissolution of the Partnership, the General Partners shall execute, publish
and
record a Notice of Dissolution, as required by law, and shall revoke any
Fictitious Business Name Statements previously filed and published by the
Joint
Venture.
ARTICLE
VII
PARTNERSHIP
MEETINGS
7.1 Call
and Place of Meetings.
Meetings
of the Partners at the principal executive office of the Partnership may
be
called pursuant to the written request of any Partner.
19
7.2 Notice
of Meeting.
Immediately upon receipt of a written request stating that one (1) or more
Partners request a meeting on a specific date (which date shall not be less
than
two (2) nor more than ten (10) days after the receipt of the request by the
Managing Partner), the Managing Partner shall immediately give notice to
all
Partners entitled to vote, as determined in accordance with Section 4.3 of
this
Agreement. Valid notice may not be given less than two (2) nor more than
thirty
(30) days prior to the date of the meeting, and shall state the location,
date,
and hour of the meeting and the general nature of the business to be transacted.
No business other than the business stated in the notice of the meeting may
be
transacted at the meeting. Notice shall be given by mail, addressed to each
Partner entitled to vote at the meeting at the address appearing in the books
of
the Partnership for that Partner.
7.3 Quorum.
At any
duly held or called meeting of Partners, the presence of the General Partners
holding at least seventy-five percent (75%) of the voting power shall be
required in order to constitute a quorum. The Partners present at a duly
called
or held meeting at which a quorum is present may continue to transact business
until adjournment, notwithstanding the withdrawal of enough Partners to leave
less than a quorum, if any action taken, other than adjournment, is approved
by
the requisite votes.
7.4 Adjournment
of Meetings.
A
Partnership meeting at which a quorum is present may be adjourned to another
time or place and any business which might have been transacted at the original
meeting may be transacted at the adjourned meeting. If a quorum is not present
at an original meeting, that meeting may be adjourned by a vote of the majority
of the interests represented either in person or by proxy. Notice of the
adjourned meeting need not be given to Partners entitled to notice if the
time
and location thereof are announced at the meeting at which the adjournment
is
taken, unless the adjournment is for more than thirty (30) days or if, after
the
adjournment, a new record date is fixed for the adjourned meeting, in which
case
notice of the adjourned meeting shall be given to each Partner of record
entitled to vote at the adjourned meeting.
7.5 Meetings
Not Duly Called, Noticed, or Held.
The
transactions consummated at any meeting of Partners, however called and noticed,
and wherever held, shall be as valid as though consummated at a meeting duly
held after regular call and notice, if a quorum is present at that meeting,
either in person or by proxy, and if, either before or after the meeting,
each
of the persons entitled to vote, not present in person or by proxy, signs
either
a written waiver of notice, a consent to the holding of the meeting, or an
approval of the minutes of the meeting.
20
7.6 Waiver
of Notice.
Attendance of a Partner at a meeting shall constitute a waiver of notice,
except
when that Partner objects, at the beginning of the meeting, to the transaction
of any business on the ground that the meeting was not lawfully called or
convened. Attendance at a meeting is not a waiver of any right to object
to the
consideration of matters required to be described in the notice of the meeting
and not so included if the objection is expressly made at the meeting. Any
Partner approval at a meeting shall be valid only if the general nature of
the
proposal is stated in any written waiver of notice.
7.7 Consent
to Action Without Meeting.
Any
action that may be taken at any meeting of the Partners may be taken without
a
meeting if a consent in writing, setting forth the action so taken, is signed
by
Partners having not less than the minimum number of votes that would be
necessary to authorize or take that action at a meeting at which all Partners
entitled to vote thereon were present and voted. In the event that any Partner
requests a meeting for the purpose of discussing or voting on the matter
so
noticed, notice of a meeting shall be given pursuant to Section 7.2 and no
action shall be taken until the meeting is held. Unless delayed by a request
for
and the conduct of a meeting, any action taken without a meeting shall be
effective three (3) days after the required minimum number of voters have
signed
consents to action without a meeting; however, the action shall be effective
immediately if all Partners sign consents to action without a
meeting.
7.8 Proxies.
A. Every
Partner entitled to vote may authorize another person or persons to act by
proxy
with respect to that Partner's interest in the Partnership.
B. Any
proxy
purporting to have been executed in accordance with this Section 7.8 shall
be
presumptively valid.
C. No
proxy
shall be valid after the expiration of three (3) months from the date thereof
unless otherwise provided in the proxy. Subject to Sections 7.8.F and 7.8.G,
every proxy continues in full force and effect until revoked by the person
executing it. The dates contained on the proxy forms presumptively determine
the
order of execution, regardless of the postmark dates on the envelopes in
which
they are mailed.
D. Except
as
provided in Section 7.8.F, a proxy is not revoked by the death or incapacity
of
the person executing it, unless, before the vote is counted, written notice
of
the death or incapacity of the maker is received by the
Partnership.
21
E. Revocation
of a proxy is effective by a writing delivered to the Partnership stating
that
the proxy is revoked or by a subsequent proxy executed by the Partner who
executed the proxy or, as to any meeting, by the attendance and exercise
of the
right to vote at that meeting by the Partner who executed the
proxy.
F. A
proxy
that states that it is irrevocable is irrevocable for the period specified
therein when it is held by any creditor or creditors of the Partnership or
the
Partner who extended or continued credit to the Partnership or the Partner
in
consideration of the proxy if the proxy states that it was given in
consideration thereof and the name of the person extending or continuing
credit.
Notwithstanding Section 7.8.D, a proxy may be made irrevocable if it is given
to
secure the performance of a duty or to protect a title, either legal or
equitable, until the happening of events which, by its terms, discharge the
obligations secured by it.
G. Notwithstanding
the period of irrevocability specified in a proxy executed pursuant to the
provisions of Section 7.8.F, such a proxy becomes revocable when the debt
of the
Partnership or Partner is paid.
H. A
proxy
may be revoked, notwithstanding a provision making it irrevocable, by the
assignment of the interest in the Partnership of the Partner who executed
the
proxy to an Assignee without knowledge of the existence of the proxy and
the
admission of that Assignee to the Partnership as a Partner.
I. The
Managing Partner may, in advance of any Partnership meeting, prescribe
additional regulations concerning the manner of execution and filing of proxies
and their valuation.
ARTICLE
VIII
MISCELLANEOUS
CLAUSES AND REPRESENTATIONS
8.1 Arbitration;
Valuation of Interest.
If a
dispute arises between the parties hereto or their heirs, personal
representatives, successors or assigns concerning the value of a Partnership
interest, such dispute shall be submitted to arbitration in the following
manner:
A. If
the
Buyer (which may consist of more than one Partner) and Seller can agree on
an
arbitrator, then such arbitrator shall resolve the dispute.
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B. If
the
Buyer and Seller cannot agree upon one arbitrator, then each party shall
select
one arbitrator and the two arbitrators so selected shall select a
third.
C. The
written decision of the single arbitrator or a majority of said arbitrators,
as
the case may be, shall constitute the arbitration award, and all parties
to such
arbitration agree to be bound thereby. The Buyer shall pay one-half (1/2)
and
the Seller shall pay one-half (1/2) of all costs of arbitration.
D. Arbitrators
so selected shall not be related to any party to this Agreement within the
third
degree as defined by the laws of the State of California.
E. Such
arbitrators shall have one or more of the following qualifications: (i) Attorney
at Law admitted to practice in California; or (ii) licensed Public Accountant
or
Certified Public Accountant.
F. All
arbitration proceedings shall be completed within sixty (60) days after
commencement.
G. The
arbitration shall be conducted in accordance with the procedures set forth
in
the California Code of Civil Procedures commencing with Section 1280, et
seq. In
addition, the arbitrators may adopt such additional rules and procedures
as they
may deem fair and reasonable under the circumstances and all such rules and
procedures shall be binding upon the Buyer and Seller without limited the
generality of the foregoing the arbitrators may require one or more appraisals
of the Property.
NOTICE:
BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING
OUT OF THE MATTERS INCLUDED IN THE ARBITRATION OF DISPUTES PROVISION DECIDED
BY
NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY
RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY
TRIAL.
BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE
‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION
AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER
THE
AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS
ARBITRATION PROVISION IS VOLUNTARY.
23
We
have
read and understand the foregoing and agree to submit disputes arising out
of
the matters included in the ‘Arbitration of Disputes’ provision to neutral
arbitration.
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JRC
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SPIC
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8.2 DISPUTE
RESOLUTION.
EXCEPT
AS OTHERWISE PROVIDED IN SECTION 8.1, ANY CONTROVERSY, CLAIM, ACTION OR DISPUTE
ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE HEARD BY A REFERENCE
PURSUANT TO THE PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS
638
THROUGH 645.1, INCLUSIVE, ACCORDING TO THE FOLLOWING PROCEDURES:
A. THE
PARTIES SHALL AGREE UPON A SINGLE REFEREE WHO SHALL THEN TRY ALL ISSUES,
WHETHER
OF FACT OR LAW, AND REPORT A FINDING AND JUDGMENT THEREON. IF THE PARTIES
ARE
UNABLE TO AGREE UPON A REFEREE WITHIN TEN (10) DAYS OF A WRITTEN REQUEST
TO DO
SO BY ANY PARTY, THEN ANY PARTY MAY THEREAFTER SEEK TO HAVE A REFEREE APPOINTED
PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 AND
640;
B. THE
PARTIES AGREE THAT THE REFEREE SHALL HAVE THE POWER TO DECIDE ALL ISSUES
OF FACT
AND LAW AND REPORT HIS/HER DECISION THEREON, AND TO ISSUE ALL LEGAL AND
EQUITABLE RELIEF APPROPRIATE UNDER THE CIRCUMSTANCES OF THE CONTROVERSY BEFORE
HIM/HER; PROVIDED, HOWEVER, THAT TO THE EXTENT THE REFEREE IS UNABLE TO ISSUE
AND/OR ENFORCE ANY SUCH LEGAL AND EQUITABLE RELIEF, EITHER PARTY MAY PETITION
THE COURT TO ISSUE AND/OR ENFORCE SUCH RELIEF ON THE BASIS OF THE REFEREE'S
DECISION;
C. THE
CALIFORNIA EVIDENCE CODE RULES OF EVIDENCE AND PROCEDURE RELATING TO THE
CONDUCT
OF THE HEARING, EXAMINATION OF WITNESSES AND PRESENTATION OF EVIDENCE SHALL
APPLY;
D. ANY
PARTY
DESIRING A STENOGRAPHIC RECORD OF THE HEARING MAY SECURE A COURT REPORTER
TO
ATTEND THE HEARING; PROVIDED, THE REQUESTING PARTY NOTIFIES THE OTHER PARTIES
OF
THE REQUEST AND PAYS FOR THE COSTS INCURRED BY THE COURT REPORTER;
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E. THE
REFEREE SHALL ISSUE A WRITTEN STATEMENT OF DECISION WHICH SHALL BE REPORTED
TO
THE COURT IN ACCORDANCE WITH CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 643
AND
MAILED PROMPTLY TO THE PARTIES;
F. JUDGMENT
MAY BE ENTERED ON THE DECISION OF THE REFEREE IN ACCORDANCE WITH CALIFORNIA
CODE
OF CIVIL PROCEDURE SECTION 644, AND THE DECISION MAY BE EXCEPTED TO, CHALLENGED
AND APPEALED ACCORDING TO LAW;
G. THE
PARTIES SHALL PROMPTLY AND DILIGENTLY COOPERATE WITH ONE ANOTHER AND THE
REFEREE, AND SHALL PERFORM SUCH ACTS AS MAY BE NECESSARY TO OBTAIN A PROMPT
AND
EXPEDITIOUS RESOLUTION OF THE DISPUTE OR CONTROVERSY IN ACCORDANCE WITH THE
TERMS HEREOF; AND
H. THE
COST
OF SUCH PROCEEDING, INCLUDING BUT NOT LIMITED TO THE REFEREE'S FEES, SHALL
INITIALLY BE BORNE EQUALLY BY THE PARTIES TO THE DISPUTE OR CONTROVERSY.
HOWEVER, THE PREVAILING PARTY IN SUCH PROCEEDING SHALL BE ENTITLED, IN ADDITION
TO ALL OTHER COSTS, TO RECOVER ITS CONTRIBUTION FOR THE COST OF THE REFERENCE
AND ITS REASONABLE ATTORNEYS' FEES AS ITEMS OF RECOVERABLE COSTS.
8.3 Amendments.
This
Agreement may be amended at any time and from time to time, but any amendment
must be in writing and signed by each person who is then a Partner.
8.4 Indemnification.
Except
for those claims arising out of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇’▇ willful and grossly negligent
acts or omissions, to the fullest extent permitted by law, the Partnership
shall, indemnify, defend (with counsel satisfactory to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇),
protect, and save and hold ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and its employees, agents, successors
and assigns, and the respective heirs, personal representatives, successors
and
assigns of each of the foregoing, and each of them (the foregoing persons
being
collectively referred to, individually, as an “Indemnitee Party,” and,
collectively, as the “Indemnitee Parties”), harmless of, from and against any
and all claims, liabilities, obligations, damages, recoveries, losses, demands,
actions, causes of action, liens, penalties, costs and expenses, including,
without limitation, attorneys’ fees and costs, of any kind whatsoever, at law or
in equity, known or unknown, matured or unmatured, arising from or relating
to
work done by or for the Partnership under the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇’▇ Contractor’s
License, including, without limitation, any claims asserted against ▇▇▇▇▇
▇.
▇▇▇▇▇▇ and/or the Contractor’s License while and for so long as JRC is a Partner
of the Partnership (collectively, “Claims”), and any and all costs and expenses
including, without limitation, all court costs and arbitration costs and
all
reasonable attorneys’ fees suffered or incurred by any Indemnitee Party in
connection with any of the foregoing Claims.
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8.5 Notices.
This
Agreement shall be directed to the parties at the addresses hereinbefore
or
hereinafter set forth opposite their respective names, or at such other places
as the Partnership shall be so notified, in writing, by the Partners; and
to the
Partnership, at its principal office, by registered or certified mail. All
notices so given shall be deemed delivered three (3) days after the postmark
date. In lieu of the foregoing all Notices may be personally served in the
same
manner as service is perfected in the event of serving a complaint filed
in a
Superior Court for the State of California. The date of personal service
shall
be the date of delivery.
8.6 Governing
Law.
All
questions with respect to the construction of this Agreement and the rights
and
liabilities of the parties hereto shall be governed by the laws of the State
of
California.
8.7 Binding
on Heirs and Successors.
Subject
to the restrictions against assignment as herein contained, this Agreement
shall
inure to the benefit of and shall be binding upon the assigns, successors
in
interest, personal representatives, estates, heirs, and legatees of each
of the
parties hereto.
8.8 Counterparts.
This
Agreement may be exercised in several counterparts and all so executed shall
constitute one agreement which shall be binding on all the parties hereto,
notwithstanding that all of the parties are not signatory to the original
or the
same counterpart.
8.9 Attorneys'
Fees.
Should
any litigation or arbitration be commenced between the parties hereto concerning
this Agreement, or the rights and duties of the Partners in relation thereto,
the party prevailing in such litigation or arbitration shall be entitled,
in
addition to such other relief as may be granted, to a reasonable sum as and
for
his attorneys' fees in such litigation which shall be determined by the court
in
such litigation or in a separate action brought for that purpose.
26
8.10
Coordination
with Uniform Partnership Act.
To the
extent any subject is addressed in this Agreement, it shall override the
provisions of the Uniform Partnership Act unless otherwise provided by
law.
8.11
Section
754 Election.
All
Partners shall execute a consent to the election under Internal Revenue Code
Section 754 and its State counterpart on request of the Managing
Partner.
EXECUTED
on _______________, 2007, at __________, California.
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GENERAL
PARTNERS:
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J.R.
▇▇▇▇▇▇ & ASSOCIATES, INC.,
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a
California corporation
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By:
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_____________________________________
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▇▇▇▇▇
▇. ▇▇▇▇▇▇
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Its:
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_____________________________________
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SOLAR
POWER INTEGRATORS,
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COMMERCIAL,
INC., a California corporation
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By:
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_____________________________________
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_____________________________________
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Its:
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_____________________________________
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