Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
     This Securities Purchase Agreement (this “Agreement”) is dated as of
September ___, 2009, by and among Solar Power, Inc., a California corporation
(the “Company”), and each purchaser identified on the signature pages hereto
(each, including its successors and assigns, a “Purchaser” and collectively, the
“Purchasers”).
RECITALS
          A. The Company and each Purchaser is executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the
United States Securities and Exchange Commission (the “Commission”) under the
Securities Act.
          B. Each Purchaser, severally and not jointly, wishes to purchase, and
the Company wishes to sell, upon the terms and conditions stated in this
Agreement, that aggregate number of shares of common stock, par value $0.0001
per share (the “Common Stock”), of the Company, set forth below such Purchaser’s
name on the signature page of this Agreement (which aggregate amount for all
Purchasers together shall be up to 20,000,000 shares of Common Stock and shall
be collectively referred to herein as the “Shares” and shall be for an aggregate
purchase price of up to $20,000,000).
          C. The Company has engaged Deutsche Bank Securities Inc. as its
exclusive placement agent (the “Placement Agent”) for the offering of the Shares
on a “best efforts” basis.
          D. Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
“Registration Rights Agreement”), pursuant to which, among other things, the
Company will agree to provide certain registration rights with respect to the
Shares under the Securities Act and the rules and regulations promulgated
thereunder and applicable state securities laws.
     NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers hereby
agree as follows:
ARTICLE I.
DEFINITIONS
     1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section 1.1:
          “Acquiring Person” has the meaning set forth in Section 4.5.
          “Affiliate” means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries, Controls, is
controlled by or is under common control with such Person, as such terms are
used in and construed under Rule 405 under the Securities Act. With respect to a
Purchaser, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Purchaser will be
deemed to be an Affiliate of such Purchaser.
          “Agreement” has the meaning set forth in the Preamble.
          “Board of Directors ” means the board of directors of the Company.

 

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          “Business Day” means any day except Saturday, Sunday, any day which is
a federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.
          “Buy-In” has the meaning set forth in Section 4.1(f).
          “Buy-In Price” has the meaning set forth in Section 4.1(f).
          “Closing” means the closing of the purchase and sale of the Shares
pursuant to this Agreement.
          “Closing Bid Price” means, for any security as of any date, (a) the
last reported closing bid price per share of Common Stock for such security on
the Principal Trading Market, as reported by Bloomberg Financial Markets, or,
(b) if the Principal Trading Market begins to operate on an extended hours basis
and does not designate the closing bid price then the last bid price of such
security prior to 4:00 P.M., New York City time, as reported by Bloomberg
Financial Markets, or (c) if the foregoing do not apply, the last closing price
of such security in the over-the-counter market on the electronic bulletin board
for such security as reported by Bloomberg Financial Markets, or (d) if no
closing bid price is reported for such security by Bloomberg Financial Markets,
the average of the bid prices of any market makers for such security as reported
in the “pink sheets” by Pink Sheets LLC. If the Closing Bid Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Closing Bid Price of such security on such date shall be the fair market
value as mutually determined by the Company and the holder of such security. All
such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination or other similar transaction during the
applicable calculation period.
          “Closing Date” means the Trading Day when all of the Transaction
Documents have been executed and delivered by the applicable parties thereto,
and all of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are
satisfied or waived, as the case may be, or such other date or dates as the
parties may agree.
          “Commission” has the meaning set forth in the Recitals.
          “Common Stock” has the meaning set forth in the Recitals, and also
includes any other class of securities into which the Common Stock may hereafter
be reclassified or changed into.
          “Common Stock Equivalents” means any securities of the Company or any
Subsidiary which would entitle the holder thereof to acquire at any time Common
Stock, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock or other securities that entitle the holder to receive, directly or
indirectly, Common Stock.
          “Company” has the meaning set forth in the Preamble.
          “Company Counsel” means Weintraub Genshlea Chediak Law Corporation.
          “Company Deliverables” has the meaning set forth in Section 2.2(a).
          “Company’s Knowledge” means with respect to any statement made to the
Company’s knowledge, that the statement is based upon the actual knowledge of
the executive officers of the Company having responsibility for the matter or
matters that are the subject of the statement.
          “Contingent Obligations” has the meaning set forth in Section 3.1(bb).

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          “Control” (including the terms “controlling”, “controlled by” or
“under common control with”) means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
          “Deadline Date” has the meaning set forth in Section 4.1(f).
          “Disclosure Materials” has the meaning set forth in Section 3.1(g).
          “Disclosure Schedules” has the meaning set forth in Section 3.1.
          “DTC” has the meaning set forth in Section 4.1(c).
          “Effective Date” means the date on which the initial Registration
Statement required by Section 2(a) of the Registration Rights Agreement is first
declared effective by the Commission.
          “Environmental Laws” has the meaning set forth in Section 3.1(ee).
          “Exchange Act” means the Securities Exchange Act of 1934, as amended,
or any successor statute, and the rules and regulations promulgated thereunder.
          “GAAP” has the meaning set forth in Section 3.1(g).
          “Hazardous Materials” has the meaning set forth in Section 3.1(ee).
          “Indebtedness” has the meaning set forth in Section 3.1(bb).
          “Insolvent” has the meaning set forth in Section 3.1(h).
          “Intellectual Property Rights” has the meaning set forth in
Section 3.1(u).
          “Irrevocable Transfer Agent Instructions” means, with respect to the
Company, the Irrevocable Transfer Agent Instructions, in the form of Exhibit D,
executed by the Company and delivered to and acknowledged in writing by the
Transfer Agent.
          “Legend Removal Date” has the meaning set forth in Section 4.1(c).
          “Lien” means any lien, charge, claim, encumbrance, security interest,
right of first refusal, preemptive right or other restrictions of any kind.
          “Material Adverse Effect” means (i) a material adverse effect on the
results of operations, assets, business or financial condition of the Company
and the Subsidiaries, taken as a whole on a consolidated basis, or
(ii) materially and adversely impair the Company’s ability to perform its
obligations under any of the Transaction Documents, provided, that none of the
following alone shall be deemed, in and of itself, to constitute a Material
Adverse Effect: (i) a change in the market price or trading volume of the Common
Stock or (ii) changes in general economic conditions or changes affecting the
industry in which the Company operates generally (as opposed to Company-specific
changes) so long as such changes do not have a disproportionate effect on the
Company and its Subsidiaries taken as a whole.
          “Material Permits” has the meaning set forth in Section 3.1(w).

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          “New York Courts” means the state and federal courts sitting in the
City of New York, Borough of Manhattan.
          “Outside Date” means the thirtieth day following the date of this
Agreement.
          “Person” means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.
          “Placement Agent” has the meaning set forth in the Recitals.
          “Press Release” has the meaning set forth in Section 4.4.
          “Principal Trading Market” means the Trading Market on which the
Common Stock is primarily listed on and quoted for trading, which, as of the
date of this Agreement and the Closing Date, shall be the OTC Bulletin Board.
          “Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
          “Purchase Price” means $1.00 per Share.
          “Purchaser” or “Purchasers” has the meaning set forth in the Recitals.
          “Purchaser Deliverables” has the meaning set forth in Section 2.2(b).
          “Purchaser Party” has the meaning set forth in Section 4.8.
          “Registration Rights Agreement” has the meaning set forth in the
Recitals.
          “Registration Statement” means a registration statement meeting the
requirements set forth in the Registration Rights Agreement and covering the
resale by the Purchasers of the Registrable Securities (as defined in the
Registration Rights Agreement).
          “Regulation D” has the meaning set forth in the Recitals.
          “Rule 144” means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
          “SEC Reports” has the meaning set forth in Section 3.1(g).
          “Secretary’s Certificate” has the meaning set forth in
Section 2.2(a)(viii).
          “Securities Act” has the meaning set forth in the Recitals.
          “Shares” has the meaning set forth in the Recitals.
          “Short Sales” include, without limitation, (i) all “short sales” as
defined in Rule 200 promulgated under Regulation SHO under the Exchange Act,
whether or not against the box, and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps, “put
equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and
similar arrangements

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(including on a total return basis), and (ii) sales and other transactions
through non-U.S. broker dealers or foreign regulated brokers (but shall not be
deemed to include the location and/or reservation of borrowable shares of Common
Stock).
          “Stock Certificates” has the meaning set forth in Section 2.2(a)(ii).
          “Subscription Amount” means, with respect to each Purchaser, the
aggregate amount to be paid for the Shares purchased hereunder as indicated on
such Purchaser’s signature page to this Agreement next to the heading “Aggregate
Purchase Price (Subscription Amount)” in United States dollars and in
immediately available funds or the cancellation, evidenced in form and substance
reasonably acceptable to Company, of outstanding amounts owed by the Company to
such Purchaser for products previously received by Company from such Purchaser
(which payment by cancellation shall be noted on such Purchaser’s signature
page).
          “Subsidiary” means any subsidiary of the Company as set forth on
Schedule 3.1(a), and shall, where applicable, include any subsidiary of the
Company formed or acquired after the date hereof.
          “Trading Affiliate” has the meaning set forth in Section 3.2(h).
          “Trading Day” means (i) a day on which the Common Stock is listed or
quoted and traded on its Principal Trading Market (other than the OTC Bulletin
Board), or (ii) if the Common Stock is not listed on a Trading Market (other
than the OTC Bulletin Board), a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported in the “pink sheets”
by Pink Sheets LLC (or any similar organization or agency succeeding to its
functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.
          “Trading Market” means whichever of the New York Stock Exchange, the
NYSE Amex (formerly the American Stock Exchange), the NASDAQ Global Select
Market, the NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin
Board on which the Common Stock is listed or quoted for trading on the date in
question.
          “Transaction Documents” means this Agreement, the schedules and
exhibits attached hereto, the Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions and any other documents or agreements explicitly
contemplated hereunder.
          “Transfer Agent” means Computershare Trust Co., Inc., the current
transfer agent of the Company, or any successor transfer agent for the Company.
ARTICLE II.
PURCHASE AND SALE
     2.1 Closing.
          (a) Amount. Subject to the terms and conditions set forth in this
Agreement, at the Closing or Closings, the Company shall issue and sell to each
Purchaser, and each Purchaser shall, severally and not jointly, purchase from
the Company, such number of shares of Common Stock equal to the quotient
resulting from dividing (i) the Subscription Amount for such Purchaser by
(ii) the Purchase Price, rounded down to the nearest whole Share.

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          (b) Closing. The Closing or Closings of the purchase and sale of the
Shares shall take place at the offices of Goodwin Procter LLP, The New York
Times Building, 620 Eighth Avenue, New York, New York on each Closing Date or at
such other locations or remotely by facsimile transmission or other electronic
means as the parties may mutually agree.
          (c) Form of Payment. Except as may otherwise be agreed to among the
Company and one or more of the Purchasers, on or prior to the Business Day
immediately prior to the Closing Date, each Purchaser shall wire its
Subscription Amount, to the extent to be paid in United States dollars and in
immediately available funds, to a non-interest bearing escrow account
established by the Company and the Placement Agent with JPMorgan Chase Bank,
N.A. (the “Escrow Agent”) as set forth on Exhibit G hereto (the aggregate
amounts received being held in escrow by the Escrow Agent are referred to herein
as the “Escrow Amount”). On the Closing Date, (a) the Company and the Placement
Agent shall instruct the Escrow Agent to deliver, in immediately available
funds, the Escrow Amount constituting the aggregate purchase price as follows:
(1) to the Placement Agent, the fees and reimbursable expenses payable to the
Placement Agent (which fees and expenses shall be set forth in such
instructions), and (2) the balance of the aggregate purchase price to the
Company, and (b) the Company shall irrevocably instruct the Transfer Agent to
deliver to each Purchaser one or more stock certificates, free and clear of all
restrictive and other legends (except as expressly provided in Section 4.1(b)
hereof), evidencing the number of Shares such Purchaser is purchasing as is set
forth on such Purchaser’s signature page to this Agreement next to the heading
“Number of Shares to be Acquired”, within three (3) Trading Days after the
Closing.
     2.2 Closing Deliveries. (a) On or prior to the Closing or Closings, the
Company shall issue, deliver or cause to be delivered to each Purchaser the
following (the “Company Deliverables”):
               (i) this Agreement, duly executed by the Company;
               (ii) facsimile copies of one or more stock certificates, free and
clear of all restrictive and other legends (except as provided in Section 4.1(b)
hereof), evidencing the Shares subscribed for by such Purchaser hereunder,
registered in the name of such Purchaser as set forth on the Stock Certificate
Questionnaire included as Exhibit B-2 hereto (the “Stock Certificate”), with the
original Stock Certificates delivered within three (3) Trading Days of Closing;
               (iii) a legal opinion of Company Counsel, dated as of the Closing
Date and in the form attached hereto as Exhibit C-1, executed by such counsel
and addressed to the Purchasers and the Placement Agent;
               (iv) a legal opinion of Hylands Law Firm, PRC counsel for the
Company, dated as of the Closing Date and in the form attached hereto as
Exhibit C-2, executed by such counsel and addressed to the Purchasers and the
Placement Agent;
               (v) a legal opinion of Boughton Peterson Yong Anderson, Hong Kong
counsel for the Company, dated as of the Closing Date and in the form attached
hereto as Exhibit C-3, executed by such counsel and addressed to the Purchasers
and the Placement Agent;
               (vi) the Registration Rights Agreement, duly executed by the
Company;
               (vii) duly executed Irrevocable Transfer Agent Instructions
acknowledged in writing by the Transfer Agent instructing the Transfer Agent to
deliver, on an expedited basis, a certificate evidencing a number of Shares
equal to such Purchaser’s Subscription Amount divided by the Purchase Price,
registered in the name of such Purchaser;

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               (viii) a certificate of the Secretary of the Company (the
“Secretary’s Certificate”), dated as of the Closing Date, (a) certifying the
resolutions adopted by the Board of Directors of the Company or a duly
authorized committee thereof approving the transactions contemplated by this
Agreement and the other Transaction Documents and the issuance of the Shares,
(b) certifying the current versions of the certificate or articles of
incorporation, as amended, and by-laws of the Company and (c) certifying as to
the signatures and authority of persons signing the Transaction Documents and
related documents on behalf of the Company, in the form attached hereto as
Exhibit E;
               (ix) the Compliance Certificate referred to in Section 5.1(h);
and
               (x) a copy of a certificate or other evidence of the formation
and good standing of the Company from the Secretary of State (or comparable
office) of the State of California, as of a date within three (3) Business Days
of the Closing Date.
          (b) On or prior to the Closing, each Purchaser shall deliver or cause
to be delivered to the Company the following (the “Purchaser Deliverables”):
               (i) this Agreement, duly executed by such Purchaser;
               (ii) its Subscription Amount, in United States dollars and in
immediately available funds, in the amount set forth as the “Purchase Price”
indicated below such Purchaser’s name on the applicable signature page hereto
under the heading “Aggregate Purchase Price (Subscription Amount)” by wire
transfer to the Escrow Account, as set forth on Exhibit G attached hereto;
               (iii) the Registration Rights Agreement, duly executed by such
Purchaser;
               (iv) a fully completed and duly executed Selling Stockholder
Questionnaire in the form attached as Annex B to the Registration Rights
Agreement; and
               (v) a fully completed and duly executed Accredited Investor
Questionnaire, satisfactory to the Company, and Stock Certificate Questionnaire
in the forms attached hereto as Exhibits B-1 and B-2, respectively.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
     3.1 Representations and Warranties of the Company. Except (i) as set forth
in the schedules delivered herewith (the “Disclosure Schedules”), which
Disclosure Schedules shall be deemed a part hereof and shall qualify any
representation made herein to the extent of the disclosure contained in the
corresponding section of the Disclosure Schedules, or (ii) disclosed in the SEC
Reports, the Company hereby represents and warrants as of the date hereof and
the Closing Date (except for the representations and warranties that speak as of
a specific date, which shall be made as of such date), to each of the Purchasers
and to the Placement Agent:
          (a) Subsidiaries. The Company has no Subsidiaries other than those
listed in Schedule 3.1(a) hereto. Except as disclosed in Schedule 3.1(a) hereto,
the Company owns, directly or indirectly, all of the capital stock or comparable
equity interests of each Subsidiary free and clear of any Lien and all the
issued and outstanding shares of capital stock or comparable equity interest of
each Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights.

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          (b) Organization and Qualification. Each of the Company and the
Subsidiaries is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite corporate or other legal authority to own and
use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and the
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.
          (c) Authorization; Enforcement. The Company has the requisite
corporate authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a party and
otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of each of the Transaction Documents to which it is a party by the
Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of the Company and no further consent or action is required by the Company, its
Board of Directors or its stockholders. Each of the Transaction Documents to
which it is a party has been (or upon delivery will be) duly executed by the
Company and is, or when delivered in accordance with the terms hereof, will
constitute, the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as may be limited by
(i) applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors rights
generally, and (ii) the effect of rules of law governing the availability of
specific performance and other equitable remedies.
          (d) No Conflicts. The execution, delivery and performance by the
Company of the Transaction Documents to which it is a party and the consummation
by the Company of the transactions contemplated hereby and thereby do not, and
will not, (i) conflict with or violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound, or affected, except to the extent that such conflict, default or rights
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, or to the Company’ Knowledge (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company or
a Subsidiary is subject (including, assuming the accuracy of the representations
and warranties of the Purchasers in this Agreement, federal and state securities
laws and regulations and the rules and regulations of any self-regulatory
organization to which the Company or its securities are subject, including all
applicable Trading Markets), or by which any property or asset of the Company or
a Subsidiary is bound or affected, except to the extent that such violation
would not reasonably be expected to have a Material Adverse Effect.
          (e) Issuance of the Shares. The Shares have been duly authorized and,
when issued and paid for in accordance with the terms of the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable and
free and clear of all Liens, other than restrictions on transfer provided for in
the Transaction Documents or imposed by applicable securities laws, and shall
not be subject to preemptive or similar rights. Assuming the accuracy of the
representations and warranties of the Purchasers in this Agreement, the Shares
will be issued in compliance with all applicable federal and state securities
laws.

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          (f) Capitalization. The aggregate number of shares and type of all
authorized, issued and outstanding classes of capital stock, options and other
securities of the Company (whether or not presently convertible into or
exercisable or exchangeable for shares of capital stock of the Company) is set
forth in Schedule 3.1(f) hereto. All outstanding shares of capital stock are
duly authorized, validly issued, fully paid and nonassessable and have been
issued in compliance with all applicable securities laws. Except as disclosed in
Schedule 3.1(f) hereto, the Company does not have outstanding any other options,
warrants, script rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or
exercisable or exchangeable for, or entered into any agreement giving any Person
any right to subscribe for or acquire, any shares of Common Stock, or securities
or rights convertible or exchangeable into shares of Common Stock. Except as set
forth on Schedule 3.1(f) hereto, and except for customary adjustments as a
result of stock dividends, stock splits, combinations of shares,
reorganizations, recapitalizations, reclassifications or other similar events,
there are no anti-dilution or price adjustment provisions contained in any
security issued by the Company (or in any agreement providing rights to security
holders) and the issuance and sale of the Shares will not obligate the Company
to issue shares of Common Stock or other securities to any Person (other than
the Purchasers) and will not result in a right of any holder of securities to
adjust the exercise, conversion, exchange or reset price under such securities.
To the Company’s Knowledge, except as disclosed in the SEC Reports and any
schedules filed with the SEC pursuant to Rule 13d-1 of the Exchange Act by
reporting persons or in Schedule 3.1(f) hereto, no Person or group of related
Persons beneficially owns (as determined pursuant to Rule 13d-3 under the
Exchange Act), or has the right to acquire, by agreement with or by obligation
binding upon the Company, beneficial ownership of in excess of 5% of the
outstanding Common Stock.
          (g) SEC Reports; Financial Statements. The Company has filed all
reports required to be filed by it under the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof. Such reports required to be filed by the Company
under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
together with any materials filed or furnished by the Company under the Exchange
Act, whether or not any such reports were required being collectively referred
to herein as the “SEC Reports” and, together with this Agreement and the
Disclosure Schedules to this Agreement, the “Disclosure Materials”, on a timely
basis or has received a valid extension of such time of filing for any of the
SEC Reports and has filed any such SEC Reports prior to the expiration of any
such extension. The Company has made available to the Purchasers or their
respective representatives true, correct and complete copies of the SEC Reports
not available on the SEC’s EDGAR system. As of their respective dates, the SEC
Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the SEC
promulgated thereunder, and none of the SEC Reports contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of filing.
Such financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), and fairly present in all material respects the
consolidated financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal,
year-end audit adjustments. All material agreements to which the Company or any
Subsidiary is a party or to which the property or assets of the Company or any
Subsidiary are subject are included as part of or identified in the SEC Reports,
to the extent such agreements are required to be included or identified pursuant
to the rules and regulations of the SEC.
          (h) Material Adverse Effect. Since the date of the latest audited
financial statements included within the SEC Reports, except as disclosed in
Schedule 3.1(h) hereto, (i) there has been no event, occurrence or development
that, individually or in the aggregate, has had or that could result in a
Material Adverse Effect, (ii) neither the Company nor any Subsidiary has
incurred any material liabilities other than

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(A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or required to
be disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting or changed its auditors, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to
its stockholders, in their capacities as such, or purchased, redeemed or made
any agreements to purchase or redeem any shares of its capital stock (except for
repurchases by the Company of shares of capital stock held by employees,
officers, directors, or consultants pursuant to an option to repurchase such
shares upon the termination of employment or services), and (v) the Company has
not issued any equity securities to any officer, director or Affiliate, except
pursuant to current or previously existing Company stock-based plans. The
Company has not taken any steps to seek protection pursuant to any bankruptcy
law nor does the Company have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy proceedings or any actual
knowledge of any fact which would reasonably lead a creditor to do so. The
Company is not as of the date hereof, and after giving effect to the
transactions contemplated hereby to occur at the applicable Closing, will not be
Insolvent (as defined below). For purposes of this Section 3.1(h), “Insolvent”
means (i) the present fair saleable value of the Company’s assets is less than
the amount required to pay the Company’s total Indebtedness (as defined in
Section 3.1(bb)), (ii) the Company is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, or (iii) the Company intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such debts mature.
          (i) Absence of Litigation. Except as disclosed in Schedule 3.1(i),
there is no action, suit, claim, or Proceeding, or, to the Company’s Knowledge,
inquiry or investigation, before or by any court, public board, government
agency, or self-regulatory organization pending or, to the Company’s Knowledge,
threatened against or affecting the Company or any of its Subsidiaries that
could, individually or in the aggregate, have a Material Adverse Effect.
          (j) Compliance. Except as described in Schedule 3.1(j), neither the
Company nor any Subsidiary, except in each case as would not, individually or in
the aggregate, reasonably be expected to have or result in a Material Adverse
Effect, (i) is in default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would
result in a default by the Company or any Subsidiary under), nor has the Company
or any Subsidiary received written notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has been
waived), (ii) is in violation of any order of any court, arbitrator or
governmental body, or (iii) is or has been in violation of any statute, rule or
regulation of any governmental authority.
          (k) Title to Assets. Neither the Company nor any Subsidiary owns any
real property. The Company and the personal property owned by them that is used
in the business of the Company and the Subsidiaries, in each case free and clear
of all Liens, except for Liens that do not, individually or in the aggregate,
have or result in a Material Adverse Effect. Any real property and facilities
held under lease by the Company and the Subsidiaries are held by them under
valid and subsisting leases of which the Company and the Subsidiaries and, to
the Company’s Knowledge, the other parties thereto, are in material compliance.
          (l) No General Solicitation; Placement Agent Fees. Neither the
Company, nor any of its Affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offer or sale of the
Shares. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or brokers’ commission (other than for
persons engaged by any Purchaser or its investment advisor) relating to or
arising out of the issuance of the Shares pursuant to this Agreement. The
Company acknowledges that it has engaged Deutsche Bank Securities Inc. as its
exclusive Placement Agent for the offering of the Shares.

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Other than the Placement Agent, and except as disclosed in Schedule 3.1(l)
hereto, the Company has not engaged any placement agent or other agent in
connection with the sale of the Shares.
          (m) No Integration. Neither the Company nor to the Company’s Knowledge
any of its Affiliates nor, any Person acting on the Company’s behalf has,
directly or indirectly, at any time within the past six months, made any offer
or sale of any security or solicitation of any offer to buy any security under
circumstances that would (i) eliminate the availability of the exemption from
registration under Regulation D under the Securities Act in connection with the
offer and sale by the Company of the Shares as contemplated hereby or (ii) cause
the offering of the Shares pursuant to the Transaction Documents to be
integrated with prior offerings by the Company for purposes of any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of any Trading Market. The Company is not required to be
registered as, and is not an Affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended. The Company is not
required to be registered as, a United States real property holding corporation
within the meaning of the Foreign Investment in Real Property Tax Act of 1980.
          (n) Private Placement. Assuming the accuracy of the representations
and warranties of the Purchasers contained in this Agreement and the compliance
by the Purchasers with the provisions set forth herein, it is not necessary, in
connection with the issuance and sale of any Shares, in the manner contemplated
by the Transaction Documents, to register any Shares under the Securities Act.
          (o) Eligibility for Registration. The Company is eligible to register
the Shares for resale by the Purchasers using Form S-1 promulgated under the
Securities Act, as provided in the Registration Rights Agreement.
          (p) Listing and Maintenance Requirements. The Company has not, in the
twelve months preceding the date hereof, received written notice from any
Trading Market on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is in compliance, in all
material respects, with all such listing and maintenance requirements.
          (q) Registration Rights. Except as provided in the Transaction
Documents, the Company has not granted or agreed to grant to any Person any
rights (including “piggy-back” registration rights) to have any securities of
the Company registered with the Commission or any other governmental authority
that have not been satisfied or waived.
          (r) Application of Takeover Protections. Except as described in
Schedule 3.1(r), there is no control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s charter documents or the
laws of its state of incorporation that is or could become applicable to any of
the Purchasers as a result of the Purchasers and the Company fulfilling their
obligations or exercising their rights under the Transaction Documents,
including, without limitation, as a result of the Company’s issuance of the
Shares and the Purchasers’ ownership of the Shares.
          (s) Disclosure. The Company confirms that neither it nor any of its
officers, directors or Affiliates, has provided any of the Purchasers or their
agents or counsel with any information that constitutes or might constitute
material, nonpublic information (other than the existence and terms of the
issuance of Shares, as contemplated by this Agreement). The Company understands
and confirms that each of the Purchasers will rely on the foregoing
representations in effecting transactions in securities of the Company. All
disclosure provided by the Company to the Purchasers regarding the Company, its
business and the transactions contemplated hereby, including the Disclosure
Schedules to this Agreement, furnished

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by or on the behalf of the Company are true and correct in all material respects
and do not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. To the
Company’s Knowledge, no event or circumstance has occurred or information exists
with respect to the Company or any of the Subsidiaries or its or their business,
properties, operations or financial conditions, which, under applicable law,
rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed. The Company
acknowledges and agrees that no Purchaser makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than
those set forth in the Transaction Documents.
          (t) Acknowledgment Regarding Purchasers’ Purchase of Shares. Based
upon the assumption that the transactions contemplated by this Agreement are
consummated in all material respects in conformity with the Transaction
Documents, the Company acknowledges and agrees that each of the Purchasers is
acting solely in the capacity of an arm’s length purchaser with respect to the
Transaction Documents and the transactions contemplated hereby and thereby. The
Company further acknowledges that no Purchaser is acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby and any advice given by any
Purchaser or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated hereby and
thereby is merely incidental to the Purchasers’ purchase of the Shares. The
Company further represents to each Purchaser that the Company’s decision to
enter into this Agreement has been based solely on the independent evaluation of
the transactions contemplated hereby by the Company and its representatives.
          (u) Patents and Trademarks. To the Company’s Knowledge, the Company
and its Subsidiaries own, or possess adequate rights or licenses to use, all
trademarks, trade names, service marks, service mark registrations, service
names, patents, patent applications, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and other
intellectual property rights (“Intellectual Property Rights”) necessary to
conduct their respective businesses as now conducted. Except as set forth in
Schedule 3.1(u), none of the Company’s Intellectual Property Rights have expired
or terminated, or are expected to expire or terminate, within three years from
the date of this Agreement. To the Company’s Knowledge, neither the Company nor
any of its Subsidiaries is infringing the Intellectual Property Rights of
others. Except as disclosed in Schedule 3.1(u), there is no claim, action or
proceeding being made or brought, or to the Company’s Knowledge, being
threatened, against the Company or its Subsidiaries regarding its Intellectual
Property Rights.
          (v) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses and location
in which the Company and the Subsidiaries are engaged.
          (w) Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports (“Material Permits”),
except where the failure to possess such Material Permits does not have or could
not reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect, and neither the Company nor any Subsidiary has received
any written notice of proceedings relating to the revocation or modification of
any Material Permit.
          (x) Transactions with Affiliates. Except as set forth on
Schedule 3.1(x) and in the Company’s SEC Reports, none of the officers or
directors of the Company is presently a party to any transaction with the
Company or any of its Subsidiaries that would be required to be disclosed
pursuant to Item 404 of Regulation S-K (other than for ordinary course services
as officers or directors), including any

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contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any such officer or director or, to
the Company’s Knowledge, any corporation, partnership, trust or other entity in
which any such officer or director has a substantial interest or is an officer,
director, trustee or partner.
          (y) Internal Accounting Controls. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
          (z) Sarbanes-Oxley Act. The Company is in compliance in all respects
with applicable requirements of the Sarbanes-Oxley Act of 2002 and applicable
rules and regulations promulgated by the Commission thereunder, except where
such noncompliance would not have, individually or in the aggregate, a Material
Adverse Effect.
          (aa) Foreign Corrupt Practices. Neither the Company nor any of its
Subsidiaries nor, to the Company’s Knowledge, any director, officer, agent,
employee or other Person acting on behalf of the Company or any of its
Subsidiaries has, in the course of its actions for, or on behalf of, the Company
(i) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or
(iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment to any foreign or domestic government official or
employee.
          (bb) Indebtedness. Except as disclosed in Schedule 3.1(bb), neither
the Company nor any of its Subsidiaries (i) has any outstanding Indebtedness (as
defined below) or (ii) is a party to any contract, agreement or instrument
relating to any Indebtedness. For purposes of this Agreement: (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed
money, (B) all obligations issued, undertaken or assumed as the deferred
purchase price of property or services (other than trade payables entered into
in the ordinary course of business), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar
instruments, (D) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property
or assets acquired with the proceeds of such indebtedness (even though the
rights and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property), (F) all monetary
obligations under any leasing or similar arrangement which, in connection with
generally accepted accounting principles, consistently applied for the periods
covered thereby, is classified as a capital lease, (G) all indebtedness referred
to in clauses (A) through (F) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any mortgage, lien, pledge, charge, security interest or other encumbrance upon
or in any property or assets (including accounts and contract rights) owned by
any Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (H) all
Contingent Obligations in respect of indebtedness or obligations of others of
the kinds referred to in clauses (A) through (G) above; and (y) “Contingent
Obligation” means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect

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thereof, is to provide assurance to the obligee of such liability that such
liability will be paid or discharged, or that any agreements relating thereto
will be complied with, or that the holders of such liability will be protected
(in whole or in part) against loss with respect thereto.
          (cc) Employee Relations. Neither the Company nor any of its
Subsidiaries is a party to any collective bargaining agreement or, to the
Company’s Knowledge, employs any member of a union. The Company believes that
its relations with its employees are as disclosed in the SEC Reports and no
disturbance by the Company’s employees exists or, to the Company’s Knowledge, is
imminent. Except as disclosed in Schedule 3.1(cc), no current executive officer
of the Company or any of its Subsidiaries (as defined in Rule 501(f) of the
Securities Act) has notified in writing the Company or any such Subsidiary that
such officer intends to leave the Company or any such Subsidiary or otherwise
terminate such officer’s employment with the Company or any such Subsidiary. To
the Company’s Knowledge, no executive officer of the Company or any of its
Subsidiaries is in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each such executive officer does not
subject the Company or any such Subsidiary to any liability with respect to any
of the foregoing matters.
          (dd) Labor Matters. The Company and its Subsidiaries are in compliance
in all material respects with all federal, state, local and foreign laws and
regulations respecting labor, employment and employment practices and benefits,
terms and conditions of employment and wages and hours, except where failure to
be in compliance would not, either individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect.
          (ee) Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all Environmental Laws (as hereinafter defined),
(ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval where, in each of the foregoing clauses (i), (ii) and (iii),
the failure to so comply could be reasonably expected to have, individually or
in the aggregate, a Material Adverse Effect. The term “Environmental Laws” means
all federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.
          (ff) Subsidiary Rights. Except as set forth in Schedule 3.1(ff), the
Company or its Subsidiaries have the unrestricted right to vote, and (subject to
limitations imposed by applicable law) to receive dividends and distributions
on, all capital securities or ownership interest of the Subsidiaries as owned by
the Company or such Subsidiary.
          (gg) Tax Status. The Company and each of its Subsidiaries (i) has made
or filed all foreign, federal and state income and all other material tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations, and (iii) has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim.

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          (hh) Regulation M Compliance. The Company has not, and to the
Company’s Knowledge no one acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of any of the Shares, (ii) sold, bid for, purchased, or, paid any
compensation for soliciting purchases of, any of the Shares, or (iii) paid or
agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company, other than, in the case of clauses (ii) and
(iii), compensation paid to the Placement Agent in connection with the placement
of the Shares.
          (ii) Disclosure Controls and Procedures. The Company maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15 of
the General Rules and Regulations under the Exchange Act) that comply with the
requirements of the Exchange Act; such disclosure controls and procedures have
been designed to ensure that information required to be disclosed by the Company
and its Subsidiaries is accumulated and communicated to the Company’s
management, including the Company’s principal executive officer and principal
financial officer by others within those entities, such disclosure controls and
procedures are effective.
     3.2 Representations and Warranties of the Purchasers. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company and the Placement Agent as
follows:
          (a) Organization; Authority. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the applicable Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder. The execution and delivery of this
Agreement by such Purchaser and performance by such Purchaser of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate or, if such Purchaser is not a corporation, such
partnership, limited liability company or other applicable like action, on the
part of such Purchaser. Each Transaction document to which it is a party has
been duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.
          (b) No Conflicts. The execution, delivery and performance by such
Purchaser of this Agreement and the Registration Rights Agreement and the
consummation by such Purchaser of the transactions contemplated hereby and
thereby will not (i) result in a violation of the organizational documents of
such Purchaser, (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which such Purchaser is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws) applicable to such
Purchaser, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of such Purchaser to perform its obligations hereunder.
          (c) Investment Intent. Such Purchaser understands that the Shares are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is

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acquiring the Shares as principal for its own account and not with a view to, or
for distributing or reselling such Shares or any part thereof in violation of
the Securities Act or any applicable state securities laws, provided, however,
that by making the representations herein, such Purchaser does not agree to hold
any of the Shares for any minimum period of time and reserves the right, subject
to the provisions of this Agreement and the Registration Rights Agreement, at
all times to sell or otherwise dispose of all or any part of such Shares
pursuant to an effective registration statement under the Securities Act or
under an exemption from such registration and in compliance with applicable
federal and state securities laws. Such Purchaser is acquiring the Shares
hereunder in the ordinary course of its business. Such Purchaser does not
presently have any agreement, plan or understanding, directly or indirectly,
with any Person to distribute or effect any distribution of any of the Shares
(or any securities which are derivatives thereof) to or through any person or
entity; such Purchaser is not a registered broker-dealer under Section 15 of the
Exchange Act or an entity engaged in a business that would require it to be so
registered as a broker-dealer.
          (d) Purchaser Status. At the time such Purchaser was offered the
Shares, it was, and at the date hereof it is, an “accredited investor” as
defined in Rule 501(a) under the Securities Act.
          (e) General Solicitation. Such Purchaser is not purchasing the Shares
as a result of any advertisement, article, notice or other communication
regarding the Shares published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general advertisement.
          (f) Experience of Such Purchaser. Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Shares, and has so
evaluated the merits and risks of such investment. Such Purchaser is able to
bear the economic risk of an investment in the Shares and, at the present time,
is able to afford a complete loss of such investment.
          (g) Access to Information. Such Purchaser acknowledges that it has had
the opportunity to review the Disclosure Materials and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Shares and the merits and risks of investing in the
Shares; (ii) access to information about the Company and the Subsidiaries and
their respective financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the
investment. Neither such inquiries nor any other investigation conducted by or
on behalf of such Purchaser or its representatives or counsel shall modify,
amend or affect such Purchaser’s right to rely on the truth, accuracy and
completeness of the Disclosure Materials and the Company’s representations and
warranties contained in the Transaction Documents. Such Purchaser has sought
such accounting, legal and tax advice as it has considered necessary to make an
informed decision with respect to its acquisition of the Shares.
          (h) Certain Trading Activities. Other than with respect to the
transactions contemplated herein, since the time that such Purchaser was first
contacted by the Company, the Placement Agent or any other Person regarding the
transactions contemplated hereby, neither the Purchaser nor any Affiliate of
such Purchaser which (x) had knowledge of the transactions contemplated hereby,
(y) has or shares discretion relating to such Purchaser’s investments or trading
or information concerning such Purchaser’s investments, including in respect of
the Shares, and (z) is subject to such Purchaser’s review or input concerning
such Affiliate’s investments or trading (collectively, “Trading Affiliates”) has
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser or Trading Affiliate, effected or agreed
to effect any purchases or sales of the securities of the Company (including,
without

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limitation, any Short Sales involving the Company’s securities). Notwithstanding
the foregoing, in the case of a Purchaser and/or Trading Affiliate that is,
individually or collectively, a multi-managed investment bank or vehicle whereby
separate portfolio managers manage separate portions of such Purchaser’s or
Trading Affiliate’s assets and the portfolio managers have no direct knowledge
of the investment decisions made by the portfolio managers managing other
portions of such Purchaser’s or Trading Affiliate’s assets, the representation
set forth above shall apply only with respect to the portion of assets managed
by the portfolio manager that have knowledge about the financing transaction
contemplated by this Agreement. Other than to other Persons party to this
Agreement, such Purchaser has maintained the confidentiality of all disclosures
made to it in connection with this transaction (including the existence and
terms of this transaction). Notwithstanding the foregoing, for avoidance of
doubt, nothing contained herein shall constitute a representation or warranty,
or preclude any actions, with respect to the identification of the availability
of, or securing of, available shares to borrow in order to effect short sales or
similar transactions in the future.
          (i) Brokers and Finders. No Person will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or any Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Purchaser.
          (j) Independent Investment Decision. Such Purchaser has independently
evaluated the merits of its decision to purchase Shares pursuant to the
Transaction Documents, and such Purchaser confirms that it has not relied on the
advice of any other Purchaser’s business and/or legal counsel in making such
decision. Such Purchaser understands that nothing in this Agreement or any other
materials presented by or on behalf of the Company to the Purchaser in
connection with the purchase of the Shares constitutes legal, tax or investment
advice. Such Purchaser has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of the Shares. Such Purchaser understands that the Placement
Agent has acted solely as the agent of the Company in this placement of the
Shares and such Purchaser has not relied on the business or legal advice of the
Placement Agent or any of its agents, counsel or Affiliates in making its
investment decision hereunder, and confirms that none of such Persons has made
any representations or warranties to such Purchaser in connection with the
transactions contemplated by the Transaction Documents.
          (k) Reliance on Exemptions. Such Purchaser understands that the Shares
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgements and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Shares.
          (l) No Governmental Review. Such Purchaser understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Shares or the
fairness or suitability of the investment in the Shares nor have such
authorities passed upon or endorsed the merits of the offering of the Shares.
          (m) Regulation M. Such Purchaser is aware that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of Common Stock
and other activities with respect to the Common Stock by the Purchasers.
          (n) Residency. Such Purchaser’s residence (if an individual) or
offices in which its investment decision with respect to the Shares was made (if
an entity) are located at the address immediately below such Purchaser’s name on
its signature page hereto.

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The Company and each of the Purchasers acknowledge and agree that no party to
this Agreement has made or makes any representations or warranties with respect
to the transactions contemplated hereby other than those specifically set forth
in this Article III and the Transaction Documents.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
     4.1 Transfer Restrictions.
          (a) Compliance with Laws. Notwithstanding any other provision of this
Article IV, each Purchaser covenants that the Shares may be disposed of only
pursuant to an effective registration statement under, and in compliance with
the requirements of, the Securities Act, or pursuant to an available exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act, and in compliance with any applicable state and federal
securities laws. In connection with any transfer of the Shares other than
(i) pursuant to an effective registration statement, (ii) to the Company,
(iii) pursuant to Rule 144 (provided that the Purchaser provides the Company
with reasonable assurances (in the form of seller and, if applicable, broker
representation letters) that the securities may be sold pursuant to such rule)
or (iv) in connection with a bona fide pledge as contemplated in Section 4.1(b),
the Company may require the transferor thereof to provide to the Company an
opinion of counsel selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Shares under the Securities Act. As a condition
of transfer, any such transferee shall agree in writing to be bound by the terms
of this Agreement and the Registration Rights Agreement and shall have the
rights of a Purchaser under this Agreement and the Registration Rights Agreement
with respect to such transferred Shares.
          (b) Legends. Certificates evidencing the Shares shall bear any legend
as required by the “blue sky” laws of any state and a restrictive legend in
substantially the following form, until such time as they are not required under
Section 4.1(c):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS
TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.
          The Company acknowledges and agrees that a Purchaser may from time to
time pledge, and/or grant a security interest in, some or all of the legended
Shares in connection with applicable securities laws, pursuant to a bona fide
margin agreement in compliance with a bona fide margin loan. Such a pledge would
not be subject to approval or consent of the Company and no legal opinion of
legal counsel to the

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pledgee, secured party or pledgor shall be required in connection with the
pledge, but such legal opinion shall be required in connection with a subsequent
transfer or foreclosure following default by the Purchaser transferee of the
pledge. No notice shall be required of such pledge, but Purchaser’s transferee
shall promptly notify the Company of any such subsequent transfer or
foreclosure. Each Purchaser acknowledges that the Company shall not be
responsible for any pledges relating to, or the grant of any security interest
in, any of the Shares or for any agreement, understanding or arrangement between
any Purchaser and its pledgee or secured party. At the appropriate Purchaser’s
expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Shares may reasonably request in connection with a
pledge or transfer of the Shares, including the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) of the Securities Act or
other applicable provision of the Securities Act to appropriately amend the list
of Selling Stockholders thereunder. Each Purchaser acknowledges and agrees that,
except as otherwise provided in Section 4.1(c), any Shares subject to a pledge
or security interest as contemplated by this Section 4.1(b) shall continue to
bear the legend set forth in this Section 4.1(b) and be subject to the
restrictions on transfer set forth in Section 4.1(a).
          (c) Removal of Legends. The legend set forth in Section 4.1(b) above
shall be removed and the Company shall issue a certificate without such legend
or any other legend to the holder of the applicable Shares upon which it is
stamped or issue to such holder by electronic delivery at the applicable balance
account at the Depository Trust Company (“DTC”), if (i) such Shares are
registered for resale under the Securities Act (provided that, if the Purchaser
is selling pursuant to the effective registration statement registering the
Shares for resale, the Purchaser agrees to only sell such Shares during such
time that such registration statement is effective and not withdrawn or
suspended, and only as permitted by such registration statement), (ii) such
Shares are sold or transferred pursuant to Rule 144 (if the transferor is not an
Affiliate of the Company), or (iii) such Shares are eligible for sale under
Rule 144, without the requirement for the Company to be in compliance with the
current public information required under Rule 144 as to such securities and
without volume or manner-of-sale restrictions. Following the earlier of (i) the
Effective Date or (ii) Rule 144 becoming available for the resale of Shares,
without the requirement for the Company to be in compliance with the current
public information required under Rule 144 as to such securities and without
volume or manner-of-sale restrictions, the Company shall cause Company Counsel
to issue to the Transfer Agent the legal opinion referred to in the Irrevocable
Transfer Agent Instructions. Any fees (with respect to the Transfer Agent,
Company Counsel or otherwise) associated with the issuance of such opinion or
the removal of such legend shall be borne by the Company. Following the
Effective Date, or at such earlier time as a legend is no longer required for
certain Shares, the Company will no later than three (3) Trading Days following
the delivery by a Purchaser to the Transfer Agent (with notice to the Company)
of a legended certificate representing Shares (endorsed or with stock powers
attached, signatures guaranteed, and otherwise in form necessary to affect the
reissuance and/or transfer), and an opinion of counsel to the extent required by
Section 4.1(a) (such third (3rd) Trading Day, the “Legend Removal Date”),
deliver or cause to be delivered to such Purchaser a certificate representing
such Shares that is free from all restrictive and other legends. The Company may
not make any notation on its records or give instructions to the Transfer Agent
that enlarge the restrictions on transfer set forth in this Section 4.1(c).
Certificates for Shares subject to legend removal hereunder may be transmitted
by the Transfer Agent to the Purchasers by crediting the account of the
Purchaser’s prime broker with DTC as directed by such Purchaser.
          (d) Irrevocable Transfer Agent Instructions. The Company shall issue
irrevocable instructions to its transfer agent, and any subsequent transfer
agent, in the form of Exhibit D attached hereto (the “Irrevocable Transfer Agent
Instructions”). The Company represents and warrants that no instruction other
than the Irrevocable Transfer Agent Instructions referred to in this
Section 4.1(d) (or instructions that are consistent therewith) will be given by
the Company to its transfer agent in connection with this Agreement, and that
the Shares shall otherwise be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement and the other
Transaction Documents and applicable law. The Company acknowledges that a breach
by it of its obligations under this Section 4.1(d)

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will cause irreparable harm to a Purchaser. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Section 4.1(d) will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section 4.1(d), that
a Purchaser shall be entitled, in addition to all other available remedies, to
an order and/or injunction restraining any breach and requiring immediate
issuance and transfer, without the necessity of showing economic loss and
without any bond or other security being required.
          (e) Acknowledgement. Each Purchaser hereunder acknowledges its primary
responsibilities under the Securities Act and accordingly will not sell or
otherwise transfer the Shares or any interest therein without complying with the
requirements of the Securities Act. While the Registration Statement remains
effective, each Purchaser hereunder may sell the Shares in accordance with the
plan of distribution contained in the Registration Statement and if it does so
it will comply therewith and with the related prospectus delivery requirements
unless an exemption therefrom is available. Each Purchaser, severally and not
jointly with the other Purchasers, agrees that if it is notified by the Company
in writing at any time that the Registration Statement registering the resale of
the Shares is not effective or that the prospectus included in such Registration
Statement no longer complies with the requirements of Section 10 of the
Securities Act, the Purchaser will refrain from selling such Shares until such
time as the Purchaser is notified by the Company that such Registration
Statement is effective or such prospectus is compliant with Section 10 of the
Securities Act, unless such Purchaser is able to, and does, sell such Shares
pursuant to an available exemption from the registration requirements of
Section 5 of the Securities Act. Both the Company and its Transfer Agent, and
their respective directors, officers, employees and agents, may rely on this
Section 4.1(e) and each Purchaser hereunder will indemnify and hold harmless
each of such persons from any breaches or violations of this Section 4.1(e).
          (f) Buy-In. If the Transfer Agent shall fail for any reason or for no
reason to issue to a Purchaser unlegended certificates within three (3) Trading
Days of receipt by Transfer Agent of all documents necessary for the removal of
the legend set forth above (the “Deadline Date”), then, in addition to all other
remedies available to such Purchaser, if on or after the Trading Day immediately
following such three (3) Trading Day period, such Purchaser purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the holder of shares of Common Stock that such
Purchaser anticipated receiving from the Transfer Agent without any restrictive
legend (a “Buy-In”), then the Company shall, within three (3) Trading Days after
of receipt by Transfer Agent of all documents necessary for the removal of the
legend set forth above and in such Purchaser’s sole discretion, either (i) pay
cash to the Purchaser in an amount equal to such Purchaser’s total purchase
price (including brokerage commissions, if any) for the shares of Common Stock
so purchased (the “Buy-In Price”), at which point the Company’s obligation to
deliver such certificate (and to issue such shares of Common Stock) shall
terminate, or (ii) promptly honor its obligation to deliver to such Purchaser a
certificate or certificates representing such shares of Common Stock and pay
cash to the Purchaser in an amount equal to the excess (if any) of the Buy-In
Price over the product of (a) such number of shares of Common Stock, times
(b) the Closing Bid Price on the Deadline Date.
     4.2 Furnishing of Information. In order to enable the Purchasers to sell
the Shares under Rule 144, for a period of twelve (12) months from the Closing,
the Company shall use its commercially reasonable efforts to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. During such twelve (12) month period, if the
Company is not required to file reports pursuant to the Exchange Act, it will
prepare and furnish to the Purchasers and make publicly available in accordance
with Rule 144(c) such information as is required for the Purchasers to sell the
Shares under Rule 144.
     4.3 Integration. The Company shall not, and shall use its commercially
reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer
for sale or solicit offers to buy or otherwise

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negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that will be integrated with the offer or sale of the Shares in a manner
that would require the registration under the Securities Act of the sale of the
Shares to the Purchasers, or that will be integrated with the offer or sale of
the Shares for purposes of the rules and regulations of any Trading Market such
that it would require stockholder approval prior to the closing of such other
transaction unless stockholder approval is obtained before the closing of such
subsequent transaction.
     4.4 Securities Laws Disclosure; Publicity. By 9:00 A.M., New York City
time, on the Trading Day immediately following the date hereof, the Company
shall issue a press release (the “Press Release”) reasonably acceptable to the
Placement Agent disclosing all material terms of the transactions contemplated
hereby. On or before 9:00 A.M., New York City time, on the second (2nd) Trading
Day immediately following the execution of this Agreement, the Company will file
a Current Report on Form 8-K with the Commission describing the terms of the
Transaction Documents (and including as exhibits to such Current Report on Form
8-K the material Transaction Documents (including, without limitation, this
Agreement and the Registration Rights Agreement)). Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser or
an Affiliate of any Purchaser, or include the name of any Purchaser or an
Affiliate of any Purchaser in any press release or filing with the Commission
(other than the Registration Statement) or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (i) as
required by federal securities law in connection with (A) any registration
statement contemplated by the Registration Rights Agreement and (B) the filing
of final Transaction Documents (including signature pages thereto) with the
Commission and (ii) to the extent such disclosure is required by law, request of
the Staff of the Commission or Trading Market regulations, in which case the
Company shall provide the Purchasers with prior written notice of such
disclosure permitted under this subclause (ii). From and after the issuance of
the Press Release, no Purchaser shall be in possession of any material,
non-public information received from the Company, any Subsidiary or any of their
respective officers, directors, employees or agents, that is not disclosed in
the Press Release unless a Purchaser shall have executed a written agreement
regarding the confidentiality and use of such information. Each Purchaser,
severally and not jointly with the other Purchasers, covenants that until such
time as the transactions contemplated by this Agreement are required to be
publicly disclosed by the Company as described in this Section 4.4, such
Purchaser will maintain the confidentiality of all disclosures made to it in
connection with this transaction (including the existence and terms of this
transaction).
     4.5 Shareholder Rights Plan. No claim will be made or enforced by the
Company or, with the consent of the Company, any other Person, that any
Purchaser is an “Acquiring Person” under any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Purchaser could be deemed to trigger the provisions of
any such plan or arrangement, in either case solely by virtue of receiving
Shares under the Transaction Documents or under any other written agreement
between the Company and the Purchasers; provided, however, that no such
Purchaser owns any equity in the Company prior to its purchase of the Shares
hereunder.
     4.6 Non-Public Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents,
including this Agreement, or as expressly required by any applicable securities
law, the Company covenants and agrees that neither it, nor any other Person
acting on its behalf, will provide any Purchaser or its agents or counsel with
any information regarding the Company that the Company believes constitutes
material non-public information without the express written consent of such
Purchaser, unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information. The Company
understands and confirms that each Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.

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     4.7 Use of Proceeds. The Company shall use the net proceeds from the sale
of the Shares hereunder for working capital for photovoltaic projects and
general corporate purposes and shall not use such proceeds for: (a) the
satisfaction of any portion of the Company’s debt (other than payment of trade
payables in the ordinary course of the Company’s business and prior practices),
(b) the redemption of any Common Stock or Common Stock Equivalents or (c) the
settlement of any outstanding litigation.
     4.8 Indemnification of Purchasers. Subject to the provisions of this
Section 4.8, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against a Purchaser
in any capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such Purchaser, with
respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of such Purchaser’s representations,
warranties or covenants under the Transaction Documents or any agreements or
understandings such Purchaser may have with any such stockholder or any
violations by the Purchaser of state or federal securities laws or any conduct
by such Purchaser which constitutes fraud, gross negligence, willful misconduct
or malfeasance). Promptly after receipt by any Person (the “Indemnified Person”)
of notice of any demand, claim or circumstances which would or might give rise
to a claim or the commencement of any action, proceeding or investigation in
respect of which indemnity may be sought pursuant to this Section 4.8, such
Indemnified Person shall promptly notify the Company in writing and the Company
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Person, and shall assume the payment of all
fees and expenses; provided, however, that the failure of any Indemnified Person
so to notify the Company shall not relieve the Company of its obligations
hereunder except to the extent that the Company is actually and materially
prejudiced by such failure to notify. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless: (i)
the Company and the Indemnified Person shall have mutually agreed to the
retention of such counsel; (ii) the Company shall have failed promptly to assume
the defense of such proceeding and to employ counsel reasonably satisfactory to
such Indemnified Person in such proceeding; or (iii) in the reasonable judgment
of counsel to such Indemnified Person, representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. The Company shall not be liable for any settlement of
any proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Without the prior written consent
of the Indemnified Person, which consent shall not be unreasonably withheld,
delayed or conditioned, the Company shall not effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Person from all liability arising out of such proceeding.
     4.9 Principal Trading Market Listing. In the time and manner required by
the Principal Trading Market, the Company shall prepare and file with such
Principal Trading Market an additional shares listing application covering all
of the Shares and shall use its commercially reasonable efforts to take all
steps necessary to cause all of the Shares to be approved for listing on the
Principal Trading Market as promptly as possible thereafter.

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     4.10 Form D; Blue Sky. The Company agrees to timely file a Form D with
respect to the Shares as required under Regulation D and to provide a copy
thereof, promptly upon the written request of any Purchaser. The Company, on or
before the Closing Date, shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for or to qualify the
Shares for sale to the Purchasers under applicable securities or “Blue Sky” laws
of the states of the United States (or to obtain an exemption from such
qualification) and shall provide evidence of such actions promptly upon the
written request of any Purchaser.
     4.11 Delivery of Shares After Closing. The Company shall deliver, or cause
to be delivered, the respective Shares purchased by each Purchaser to such
Purchaser within three (3) Trading Days of the Closing Date.
     4.12 Short Sales and Confidentiality After The Date Hereof. Such Purchaser
shall not, and shall cause its Trading Affiliates not to, engage, directly or
indirectly, in any transactions in the Company’s securities (including, without
limitation, any Short Sales involving the Company’s securities) during the
period from the date hereof until the earlier of such time as (i) the
transactions contemplated by this Agreement are first publicly announced as
required by and described in Section 4.4 or (ii) this Agreement is terminated in
full pursuant to Section 6.18. Each Purchaser, severally and not jointly with
the other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company as
described in Section 4.4, such Purchaser will maintain the confidentiality of
the existence and terms of this transaction and the information included in the
Transaction Documents and Disclosure Schedules. Notwithstanding the foregoing,
no Purchaser makes any representation, warranty or covenant hereby that it will
not engage in Short Sales in the securities of the Company after the time that
the transactions contemplated by this Agreement are first publicly announced as
described in Section 4.4; provided, however, each Purchaser agrees, severally
and not jointly with any Purchasers, that they will not enter into any Net Short
Sales (as hereinafter defined) from the period commencing on the Closing Date
and ending on the earliest of (x) the Effective Date of the initial Registration
Statement, (y) the twenty-four (24) month anniversary of the Closing Date or
(z) the date that such Purchaser no longer holds any Shares. For purposes of
this Section 4.12, a “Net Short Sale” by any Purchaser shall mean a sale of
Common Stock by such Purchaser that is marked as a short sale and that is made
at a time when there is no equivalent offsetting long position in Common Stock
held by such Purchaser. Notwithstanding the foregoing, in the event that a
Purchaser is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the
representation set forth above shall apply only with respect to the portion of
assets managed by the portfolio manager that have knowledge about the financing
transaction contemplated by this Agreement. Moreover, notwithstanding the
foregoing, in the event that a Purchaser has sold Shares pursuant to Rule 144
prior to the Effective Date of the initial Registration Statement and the
Company has failed to deliver certificates without legends prior to the
settlement date for such sale (assuming that such certificates meet the
requirements set forth in Section 4.1(c) for the removal of legends), the
provisions of this Section 4.12 shall not prohibit the Purchaser from entering
into Net Short Sales for the purpose of delivering shares of Common Stock in
settlement of such sale. Each Purchaser understands and acknowledges, severally
and not jointly with any other Purchaser, that the Commission currently takes
the position that covering a short position established prior to effectiveness
of a resale registration statement with shares included in such registration
statement would be a violation of Section 5 of the Securities Act, as set forth
in Item 65, Section 5 under Section A, of the Manual of Publicly Available
Telephone Interpretations, dated July 1997, compiled by the Office of Chief
Counsel, Division of Corporation Finance.

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     4.13 Subsequent Equity Sales. From the date hereof until the earlier of
(i) one hundred eighty (180) days following the Closing Date or (ii) thirty
(30) days after the Effective Date, neither the Company nor any Subsidiary shall
issue shares of Common Stock or Common Stock Equivalents, except that the
Company and its Subsidiaries may issue Excluded Securities, as defined in
Section 4.14 below; provided, however, the thirty (30) day period set forth in
this Section 4.13 shall be extended for the number of Trading Days during such
period in which (i) trading in the Common Stock is suspended by any Trading
Market, or (ii) following the Effective Date, the Registration Statement is not
effective or the prospectus included in the Registration Statement may not be
used by the Purchasers for the resale of the Shares.
     4.14 Additional Issuances of Securities. (i) For purposes of this Section
4.14, the following definitions shall apply.
               (1) “Approved Stock Plan” means any employee benefit plan which
has been approved by the Board of Directors of the Company, pursuant to which
the Company’s securities may be issued to any employee, officer, director or
consultant for services provided to the Company.
               (2) “Convertible Securities” means any stock or securities (other
than Options) of the Company convertible into or exercisable or exchangeable for
Common Stock.
               (3) “Excluded Securities” means Common Stock issued or issuable:
(i) in connection with any Approved Stock Plan; (ii) upon conversion of any
Options or Convertible Securities which are outstanding on the day immediately
preceding the Closing Date, provided that the terms of such Options or
Convertible Securities are not amended, modified or changed on or after the
Closing Date; (iii) pursuant to a bona fide firm commitment underwritten public
offering with a nationally recognized underwriter which generates gross proceeds
to the Company in excess of $20,000,000 (other than “equity lines”); or (iv) in
connection with any acquisition by the Company, whether through an acquisition
of stock or a merger of any business, assets or technologies the primary purpose
of which is not to raise equity capital in an amount not to exceed, in the
aggregate, 10% of the outstanding shares of Common Stock in any calendar year.
               (4) “Options” means any rights, warrants or options to subscribe
for or purchase Common Stock or Convertible Securities.
          (ii) From the date hereof until the one (1) year anniversary following
the Effective Date, the Company will not, directly or indirectly, offer, sell,
grant any option to purchase, or otherwise dispose of (or announce any offer,
sale, grant or any option to purchase or other disposition of) any of its or its
Subsidiaries’ equity or equity equivalent securities, including without
limitation any debt, preferred stock or other instrument or security that is, at
any time during its life and under any circumstances, convertible into or
exchangeable or exercisable for shares of Common Stock or Common Stock
Equivalents (any such offer, sale, grant, disposition or announcement being
referred to as a “Subsequent Placement”) unless the Company shall have first
complied with this Section 4.14(ii).
               (1) The Company shall deliver to each Purchaser an irrevocable
written notice (the “Offer Notice”) of any proposed or intended issuance or sale
or exchange (the “Offer”) of the securities being offered (the “Offered
Securities”) in a Subsequent Placement, which Offer Notice shall (w) identify
and describe the Offered Securities, (x) describe the price and other terms upon
which they are to be issued, sold or exchanged, and the number or amount of the
Offered Securities to be issued, sold or exchanged, (y) identify the persons or
entities (if known) to which or with which the Offered Securities are to be
offered, issued, sold or exchanged and (z) offer to issue and sell to or
exchange with such Purchaser a pro rata portion of the Offered Securities,
allocated among such Purchaser (a) based on such Purchaser’s pro rata portion of
the aggregate shares of Common Stock purchased hereunder (the “Basic Amount”),
and (b) with respect to each Purchaser that elects to purchase its Basic Amount,
any additional portion of the Offered Securities

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attributable to the Basic Amounts of other Purchasers as such Purchaser shall
indicate it will purchase or acquire should the other Purchasers subscribe for
less than their Basic Amounts (the “Undersubscription Amount”).
               (2) To accept an Offer, in whole or in part, such Purchaser must
deliver a written notice to the Company prior to the end of the tenth (10th)
Business Day after such Purchaser’s receipt of the Offer Notice (the “Offer
Period”), setting forth the portion of such Purchaser’s Basic Amount that such
Purchaser elects to purchase and, if such Purchaser shall elect to purchase all
of its Basic Amount, the Undersubscription Amount, if any, that such Purchaser
elects to purchase (in either case, the “Notice of Acceptance”). If the Basic
Amounts subscribed for by all Purchasers are less than the total of all of the
Basic Amounts, then each Purchaser who has set forth an Undersubscription Amount
in its Notice of Acceptance shall be entitled to purchase, in addition to the
Basic Amounts subscribed for, the Undersubscription Amount it has subscribed
for; provided, however, that if the Undersubscription Amounts subscribed for
exceed the difference between the total of all the Basic Amounts and the Basic
Amounts subscribed for (the “Available Undersubscription Amount”), each
Purchaser who has subscribed for any Undersubscription Amount shall be entitled
to purchase only that portion of the Available Undersubscription Amount as the
Basic Amount of such Purchaser bears to the total Basic Amounts of all
Purchasers that have subscribed for Undersubscription Amounts, subject to
rounding by the Company to the extent its deems reasonably necessary.
               (3) The Company shall have ten (10) Business Days from the
expiration of the Offer Period above to offer, issue, sell or exchange all or
any part of such Offered Securities as to which a Notice of Acceptance has not
been given by the eligible Purchasers (the “Refused Securities”), but only to
the offerees described in the Offer Notice (if so described therein) and only
upon terms and conditions (including, without limitation, unit prices and
interest rates) that are not more favorable to the acquiring person or persons
or less favorable to the Company than those set forth in the Offer Notice.
               (4) In the event the Company shall propose to sell less than all
the Refused Securities (any such sale to be in the manner and on the terms
specified in Section 4.14(ii)(3) above), then each Purchaser may, at its sole
option and in its sole discretion, reduce the number or amount of the Offered
Securities specified in its Notice of Acceptance to an amount that shall be not
less than the number or amount of the Offered Securities that such Purchaser
elected to purchase pursuant to Section 4.14(ii)(2) above multiplied by a
fraction, (i) the numerator of which shall be the number or amount of Offered
Securities the Company actually proposes to issue, sell or exchange (including
Offered Securities to be issued or sold to Purchasers pursuant to Section
4.14(ii)(3) above prior to such reduction) and (ii) the denominator of which
shall be the original amount of the Offered Securities. In the event that any
Purchaser so elects to reduce the number or amount of Offered Securities
specified in its Notice of Acceptance, the Company may not issue, sell or
exchange more than the reduced number or amount of the Offered Securities unless
and until such securities have again been offered to the Purchasers in
accordance with Section 4.14(ii)(1) above.
               (5) Upon the closing of the issuance, sale or exchange of all or
less than all of the Refused Securities, the Purchasers shall acquire from the
Company, and the Company shall issue to the Purchasers, the number or amount of
Offered Securities specified in the Notices of Acceptance, as reduced pursuant
to Section 4.14(ii)(3) above if the Purchasers have so elected, upon the terms
and conditions specified in the Offer. Notwithstanding anything to the contrary
contained in this Agreement, if the Company does not consummate the closing of
the issuance, sale or exchange of all or less than all of the Refused Securities
within ten (10) Business Days of the expiration of the Offer Period, the Company
shall issue to the Purchasers the number or amount of Offered Securities
specified in the Notices of Acceptance, as reduced pursuant to Section
4.14(ii)(4) above if the Purchasers have so elected, upon the terms and
conditions specified in the Offer. The purchase by the Purchasers of any Offered
Securities is subject in all cases to the preparation, execution and delivery by
the Company and the Purchasers of a purchase agreement relating to such Offered
Securities reasonably satisfactory in form and substance to the Purchasers and
their respective counsel.

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               (6) Any Offered Securities not acquired by the Purchasers or
other persons in accordance with Section 4.14(ii)(3) above may not be issued,
sold or exchanged until they are again offered to the Purchasers under the
procedures specified in this Agreement.
          (iii) The restrictions contained in subsection (ii) of this
Section 4.14 shall not apply in connection with any Excluded Securities.
     4.15 Board Appointment. Within ten (10) business days of the Closing,
Company shall have taken all action necessary to cause Francis Chen, as the
designee of WI Harper, to be appointed to the Board of Directors.
ARTICLE V.
CONDITIONS PRECEDENT TO CLOSING
     5.1 Conditions Precedent to the Obligations of the Purchasers to Purchase
Shares. The obligation of each Purchaser to acquire Shares at the Closing is
subject to the fulfillment to such Purchaser’s satisfaction, on or prior to the
Closing Date, of each of the following conditions, any of which may be waived by
such Purchaser (as to itself only):
          (a) Representations and Warranties. The representations and warranties
of the Company contained herein shall be true and correct in all material
respects (except for those representations and warranties which are qualified as
to materiality, in which case such representations and warranties shall be true
and correct in all respects) as of the date when made and as of the Closing
Date, as though made on and as of such date, except for such representations and
warranties that speak as of a specific date.
          (b) Performance. The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by it at or prior to the Closing.
          (c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.
          (d) Consents. The Company shall have obtained in a timely fashion any
and all consents, permits, approvals, registrations and waivers necessary for
consummation of the purchase and sale of the Shares, all of which shall be and
remain so long as necessary in full force and effect.
          (e) Adverse Changes. Since the date of execution of this Agreement, no
event or series of events shall have occurred that has had or would reasonably
be expected to have a Material Adverse Effect.
          (f) Listing. The OTC Bulletin Board shall have approved the listing of
additional shares application for the Shares.
          (g) No Suspensions of Trading in Common Stock. The Common Stock shall
not have been suspended, as of the Closing Date, by the Commission or the
Principal Trading Market from trading on the Principal Trading Market nor shall
suspension by the Commission or the Principal Trading Market have

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been threatened, as of the Closing Date, either (A) in writing by the Commission
or the Principal Trading Market or (B) by falling below the minimum listing
maintenance requirements of the Principal Trading Market.
          (h) Company Deliverables. The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(a).
          (i) Compliance Certificate. The Company shall have delivered to each
Purchaser a certificate, dated as of the Closing Date and signed by its Chief
Executive Officer or its Chief Financial Officer, dated as of the Closing Date,
certifying to the fulfillment of the conditions specified in Sections 5.1(a) and
(b) in the form attached hereto as Exhibit F.
          (j) Termination. This Agreement shall not have been terminated as to
such Purchaser in accordance with Section 6.18 herein.
     5.2 Conditions Precedent to the Obligations of the Company to sell Shares.
The Company’s obligation to sell and issue the Shares at the Closing to the
Purchasers is subject to the fulfillment to the satisfaction of the Company on
or prior to the Closing Date of the following conditions, any of which may be
waived by the Company:
          (a) Representations and Warranties. The representations and warranties
made by the Purchasers in Section 3.2 hereof shall be true and correct in all
material respects (except for those representations and warranties which are
qualified as to materiality, in which case such representations and warranties
shall be true and correct in all respects) as of the date when made, and as of
the Closing Date as though made on and as of such date, except for
representations and warranties that speak as of a specific date.
          (b) Performance. Such Purchaser shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by such Purchaser at or prior to the Closing Date.
          (c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.
          (d) Consents. The Company shall have obtained in a timely fashion any
and all consents, permits, approvals, registrations and waivers necessary for
consummation of the purchase and sale of the Shares, all of which shall be and
remain so long as necessary in full force and effect.
          (e) Purchasers Deliverables. Such Purchaser shall have delivered its
Purchaser Deliverables in accordance with Section 2.2(b).
          (f) Listing. The OTC Bulletin Board shall have approved the listing of
additional shares application for the Shares.
          (g) Termination. This Agreement shall not have been terminated as to
such Purchaser in accordance with Section 6.18 herein.

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ARTICLE VI.
MISCELLANEOUS
     6.1 Fees and Expenses. The Company and the Purchasers shall each pay the
fees and expenses of their respective advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party in connection
with the negotiation, preparation, execution, delivery and performance of this
Agreement, except that the Company shall reimburse WI Harper for its legal and
due diligence expenses in an amount not to exceed $20,000. The Company shall pay
all Transfer Agent fees, stamp taxes and other taxes and duties levied in
connection with the sale and issuance of the Shares to the Purchasers.
     6.2 Entire Agreement. The Transaction Documents, together with the exhibits
and schedules thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules. At or after the Closing, and without further
consideration, the Company and the Purchasers will execute and deliver to the
other such further documents as may be reasonably requested in order to give
practical effect to the intention of the parties under the Transaction
Documents.
     6.3 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile (provided the sender
receives a machine-generated confirmation of successful transmission) at the
facsimile number specified in this Section 6.3 prior to 5:00 P.M., New York City
time, on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section 6.3 on a day that is not a Trading Day or later
than 5:00 P.M., New York City time, on any Trading Day, (c) the Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service with next day delivery specified, or (d) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as follows:

         
 
  If to the Company:   Solar Power, Inc.
 
      1115 Orlando Avenue
 
      Roseville, California 95661
 
      Telephone No.: (916) 745-0900
 
      Facsimile No.: (916) 745-0999
 
      Attention: Stephen C. Kircher
 
      E-mail: skircher@solarpowerinc.net
 
       
 
  With a copy to:   Weintraub Genshlea Chediak Law Corporation
 
      400 Capitol Mall, Suite 1100
 
      Sacramento, California 95814
 
      Telephone No.: (916) 558-6028
 
      Facsimile No.: (916) 446-1611
 
      Attention: David C. Adams, Esq.
 
      E-mail: dadams@weintraub.com
 
       
 
  If to a Purchaser:   To the address set forth under such Purchaser’s name on
the signature page hereof;

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
     6.4 Amendments; Waivers; No Additional Consideration. No provision of this
Agreement may be waived, modified, supplemented or amended except in a written
instrument signed, in the case of an

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amendment, by the Company and the Purchasers of at least a majority in interest
of the Shares still held by Purchasers or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right. No consideration shall be
offered or paid to any Purchaser to amend or consent to a waiver or modification
of any provision of any Transaction Document unless the same consideration is
also offered to all Purchasers who then hold Shares.
     6.5 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party. This Agreement
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the Transaction
Documents.
     6.6 Successors and Assigns. The provisions of this Agreement shall inure to
the benefit of and be binding upon the parties and their successors and
permitted assigns. This Agreement, or any rights or obligations hereunder, may
not be assigned by the Company without the prior written consent of each
Purchaser. Any Purchaser may assign its rights hereunder in whole or in part to
any Person to whom such Purchaser assigns or transfers any Shares in compliance
with the Transaction Documents and applicable law, provided such transferee
shall agree in writing to be bound, with respect to the transferred Shares, by
the terms and conditions of this Agreement that apply to the “Purchasers”.
     6.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except (i) the Placement Agent is an intended third party
beneficiary of Article III hereof and (ii) each Purchaser Party is an intended
third party beneficiary of Section 4.8.
     6.8 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
Affiliates, employees or agents) shall be commenced exclusively in the New York
Courts. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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     6.9 Survival. Subject to applicable statute of limitations, the
representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery of the Shares.
     6.10 Execution. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile signature page were an original thereof.
     6.11 Severability. If any provision of this Agreement is held to be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
     6.12 Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights.
     6.13 Replacement of Shares. If any certificate or instrument evidencing any
Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause
to be issued in exchange and substitution for and upon cancellation thereof, or
in lieu of and substitution therefor, a new certificate or instrument, but only
upon receipt of evidence reasonably satisfactory to the Company and the Transfer
Agent of such loss, theft or destruction and the execution by the holder thereof
of a customary lost certificate affidavit of that fact and an agreement to
indemnify and hold harmless the Company and the Transfer Agent for any losses in
connection therewith or, if required by the Transfer Agent, a bond in such form
and amount as is required by the Transfer Agent. The applicants for a new
certificate or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Shares. If a
replacement certificate or instrument evidencing any Shares is requested due to
a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.
     6.14 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agree to waive in any
action for specific performance of any such obligation (other than in connection
with any action for a temporary restraining order) the defense that a remedy at
law would be adequate.
     6.15 Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law

30

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or equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.
     6.16 Adjustments in Share Numbers and Prices. In the event of any stock
split, subdivision, dividend or distribution payable in shares of Common Stock
(or other securities or rights convertible into, or entitling the holder thereof
to receive directly or indirectly shares of Common Stock), combination or other
similar recapitalization or event occurring after the date hereof and prior to
the Closing, each reference in any Transaction Document to a number of shares or
a price per share shall be deemed to be amended to appropriately account for
such event.
     6.17 Independent Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. The decision of each Purchaser to
purchase Shares pursuant to the Transaction Documents has been made by such
Purchaser independently of any other Purchaser and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company or any Subsidiary which may
have been made or given by any other Purchaser or by any agent or employee of
any other Purchaser, and no Purchaser and any of its agents or employees shall
have any liability to any other Purchaser (or any other Person) relating to or
arising from any such information, materials, statement or opinions. Nothing
contained herein or in any Transaction Document, and no action taken by any
Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser acknowledges that no other Purchaser has
acted as agent for such Purchaser in connection with making its investment
hereunder and that no Purchaser will be acting as agent of such Purchaser in
connection with monitoring its investment in the Shares or enforcing its rights
under the Transaction Documents. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose. Each Purchaser has been
represented by its own separate legal counsel in its review and negotiation of
the Transaction Documents. For reasons of administrative convenience only,
Purchasers and their respective counsels have chosen to communicate with the
Company through Goodwin Procter LLP, counsel to the Placement Agent. Each
Purchaser acknowledges that Goodwin Procter LLP has rendered legal advice to the
Placement Agent and not to such Purchaser in connection with the transactions
contemplated hereby, and that each such Purchaser has relied for such matters on
the advice of its own respective counsel. The Company has elected to provide all
Purchasers with the same terms and Transaction Documents for the convenience of
the Company and not because it was required or requested to do so by any
Purchaser.
     6.18 Termination. This Agreement may be terminated and the sale and
purchase of the Shares abandoned at any time prior to the Closing by either the
Company or any Purchaser (with respect to itself only) upon written notice to
the other, if the Closing has not been consummated on or prior to 5:00 P.M., New
York City time, on the Outside Date; provided, however, that the right to
terminate this Agreement under this Section 6.18 shall not be available to any
Person whose failure to comply with its obligations under this Agreement has
been the cause of or resulted in the failure of the Closing to occur on or
before such time. Nothing in this Section 6.18 shall be deemed to release any
party from any liability for any breach by such party of the terms and
provisions of this Agreement or the other Transaction Documents or to impair the
right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents. In the
event of a termination pursuant to this Section 6.18,

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the Company shall promptly notify all non-terminating Purchasers. Upon a
termination in accordance with this Section 6.18, the Company and the
terminating Purchaser(s) shall not have any further obligation or liability
(including arising from such termination) to the other, and no Purchaser will
have any liability to any other Purchaser under the Transaction Documents as a
result therefrom.

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     IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

            SOLAR POWER, INC.
      By:           Name:           Title:        

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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  NAME OF PURCHASER:            
 
     
 
  By:            
 
   
 
  Name:    
 
  Title:      
 
  Aggregate Purchase Price (Subscription Amount): $  
 
     
 
  Number of Shares to be Acquired:            
 
     
 
  Tax ID No.:            
 
   
 
           
 
  Address for Notice:  
 
 
 
   
 
       
 
 
 
   
 
       
 
 
 
     
 
  Telephone No.:            
 
   
 
           
 
  Facsimile No.:            
 
   
 
           
 
  E-mail Address:            
 
     
 
  Attention:            
 
   

          Delivery Instructions:     (if different than above)    
 
       
c/o
       
 
 
 
   

         
Street:
       
 
 
 
   

         
City/State/Zip:
       
 
 
 
   

         
Attention:
       
 
 
 
   

         
Telephone No.:
       
 
 
 
   

 

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EXHIBITS:

     
A:
  Form of Registration Rights Agreement
B-1:
  Accredited Investor Questionnaire
B-2:
  Stock Certificate Questionnaire
C-1:
  Form of Opinion of Company Counsel
C-2:
  Form of Opinion of PRC Counsel
C-3:
  Form of Opinion of Hong Kong Counsel
D:
  Form of Irrevocable Transfer Agent Instructions
E:
  Form of Secretary’s Certificate
F:
  Form of Officer’s Certificate
G:
  Wire Instructions

 

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EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT

 

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INSTRUCTION SHEET
(to be read in conjunction with the entire Securities Purchase Agreement and
Registration Rights Agreement)

A.   Complete the following items in the Securities Purchase Agreement and/or
Registration Rights Agreement:

  1.   Provide the information regarding the Purchaser requested on the
signature page. The Securities Purchase Agreement and the Registration Rights
Agreement must be executed by an individual authorized to bind the Purchaser.  
  2.   Exhibit B-1 — Accredited Investor Questionnaire:         Provide the
information requested by the Accredited Investor Questionnaire     3.  
Exhibit B-2 Stock Certificate Questionnaire:         Provide the information
requested by the Stock Certificate Questionnaire     4.   Annex B to the
Registration Rights Agreement — Selling Securityholder Notice and Questionnaire
        Provide the information requested by the Selling Securityholder Notice
and Questionnaire     5.   Return the signed Securities Purchase Agreement and
Registration Rights Agreement to:

Jeff Lassiter
Deutsche Bank Securities Inc.
101 California Street
48th Floor
San Francisco, CA 94111
Tel: (415) 617-3050
Fax: (415) 617-3014
Email: jeffrey.lassiter@db.com

B.   Instructions regarding the transfer of funds for the purchase of Shares is
set forth on Exhibit G to the Securities Purchase Agreement.

 

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EXHIBIT B-1
ACCREDITED INVESTOR QUESTIONNAIRE
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
To:     Solar Power, Inc.
This Investor Questionnaire (“Questionnaire”) must be completed by each
potential investor in connection with the offer and sale of the shares of the
common stock, par value $0.0001 per share (the “Securities”), of Solar Power,
Inc., a California corporation (the “Corporation”). The Securities are being
offered and sold by the Corporation without registration under the Securities
Act of 1933, as amended (the “Act”), and the securities laws of certain states,
in reliance on the exemptions contained in Section 4(2) of the Act and on
Regulation D promulgated thereunder and in reliance on similar exemptions under
applicable state laws. The Corporation must determine that a potential investor
meets certain suitability requirements before offering or selling Securities to
such investor. The purpose of this Questionnaire is to assure the Corporation
that each investor will meet the applicable suitability requirements. The
information supplied by you will be used in determining whether you meet such
criteria, and reliance upon the private offering exemptions from registration is
based in part on the information herein supplied.
This Questionnaire does not constitute an offer to sell or a solicitation of an
offer to buy any security. Your answers will be kept strictly confidential.
However, by signing this Questionnaire, you will be authorizing the Corporation
to provide a completed copy of this Questionnaire to such parties as the
Corporation deems appropriate in order to ensure that the offer and sale of the
Securities will not result in a violation of the Act or the securities laws of
any state and that you otherwise satisfy the suitability standards applicable to
purchasers of the Securities. All potential investors must answer all applicable
questions and complete, date and sign this Questionnaire. Please print or type
your responses and attach additional sheets of paper if necessary to complete
your answers to any item.
PART A. BACKGROUND INFORMATION

     
Name of Beneficial Owner of the Securities:
   
 
   

     
Business Address:
   
 
   

              (Number and Street)

      (City)   (State)   (Zip Code)

     
Telephone Number: (                    )
   
 
   

If a corporation, partnership, limited liability company, trust or other entity:

     
Type of entity:
   
 
   

     
State of formation:                                        
  Approximate Date of formation:                                         

Were you formed for the purpose of investing in the securities being offered?
     Yes                               No                     

 

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If an individual:

     
Residence Address:
   
 
   

              (Number and Street)

      (City)   (State)   (Zip Code)

     
Telephone Number: (                     )
   
 
   

         
Age:                      
  Citizenship:                         Where registered to vote:          
           

Set forth in the space provided below the state(s), if any, in the United States
in which you maintained your residence during the past two years and the dates
during which you resided in each state:
Are you a director or executive officer of the Corporation?
     Yes                               No                     

Social Security or Taxpayer Identification No.    

PART B. ACCREDITED INVESTOR QUESTIONNAIRE
     In order for the Company to offer and sell the Securities in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor status. Please initial each category applicable
to you as a Purchaser of Securities of the Company.

     
___(1)
  A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and
loan association or other institution as defined in Section 3(a)(5)(A) of the
Securities Act whether acting in its individual or fiduciary capacity;
 
   
___ (2)
  A broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934;
 
   
___ (3)
  An insurance company as defined in Section 2(13) of the Securities Act;
 
   
___ (4)
  An investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that Act;
 
   
___ (5)
  A Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958;
 
   
___ (6)
  A plan established and maintained by a state, its political subdivisions, or
any agency or instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of $5,000,000;
 
   
___ (7)
  An employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974, if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such act, which is either a bank, savings and loan

 

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  association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors;
 
   
___ (8)
  A private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940;
 
   
___ (9)
  An organization described in Section 501(c)(3) of the Internal Revenue Code, a
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the Securities, with total assets in
excess of $5,000,000;
 
   
___ (10)
  A trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Securities, whose purchase is directed by a
sophisticated person who has such knowledge and experience in financial and
business matters that such person is capable of evaluating the merits and risks
of investing in the Company;
 
   
___(11)
  A natural person whose individual net worth, or joint net worth with that
person’s spouse, at the time of his purchase exceeds $1,000,000;
 
   
___(12)
  A natural person who had an individual income in excess of $200,000 in each of
the two most recent years, or joint income with that person’s spouse in excess
of $300,000, in each of those years, and has a reasonable expectation of
reaching the same income level in the current year;
 
   
___(13)
  An executive officer or director of the Company;
 
   
___(14)
  An entity in which all of the equity owners qualify under any of the above
subparagraphs. If the undersigned belongs to this investor category only, list
the equity owners of the undersigned, and the investor category which each such
equity owner satisfies.

A. FOR EXECUTION BY AN INDIVIDUAL:

             
                    
  By            
 
   
Date
     
 
   
 
  Print Name:        
 
     
 
    B. FOR EXECUTION BY AN ENTITY:   Entity Name:          
 
 
 
   
 
           
                    
  By            
 
   
Date
           
 
  Print Name:            
 
   
 
  Title:            
 
   

 

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C. ADDITIONAL SIGNATURES (if required by partnership, corporation or trust
document):

              Entity Name:          
 
 
 
   
 
           
                    
  By            
 
   
Date
     
 
   
 
  Print Name:        
 
     
 
   
 
  Title:            
 
      Entity Name:          
 
 
 
   
 
           
                    
  By            
 
   
Date
     
 
   
 
  Print Name:        
 
     
 
   
 
  Title:            
 
   
 
     
 
   

 

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EXHIBIT B-2
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 2.2(b) of the Agreement, please provide us with the
following information:

         
1.
  The exact name that the Shares are to be registered in (this is the name that
will appear on the stock certificate(s)). You may use a nominee name if
appropriate:    
 
       
 
       
2.
  Number of stock certificates to be issued:    
 
       
 
       
3.
  The relationship between the Purchaser of the Shares and the Registered Holder
listed in response to Item 1 above:    
 
       
 
       
4.
  The mailing address, telephone and telecopy number of the Registered Holder
listed in response to Item 1 above:    
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
5.
  The Tax Identification Number (or, if an individual, the Social Security
Number) of the Registered Holder listed in response to Item 1 above:    
 
       

 

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EXHIBIT C-1
FORM OF OPINION OF COMPANY COUNSEL

1.   The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of California, with corporate power
and authority to own, lease and operate its properties and to carry on its
business as, to our knowledge, it is now conducted.   2.   Each of Yes! Solar
Inc., and Yes! Construction Services, Inc., and SPIC, Inc. (the “U.S.
Subsidiaries”) is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of California, with corporate power and
authority to own, lease and operate its properties and to carry on its business
as, to our knowledge, it is now conducted.   3.   The Company has all necessary
corporate power and authority to execute and deliver the Transaction Documents,
to perform its obligations thereunder, to issue the Shares and to consummate the
other transactions contemplated thereby.   4.   Each of the Transaction
Documents has been duly authorized, executed and delivered by the Company and,
assuming the due authorization, execution and delivery thereof by all parties
thereto other than the Company, constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.   5.  
The Company has all necessary corporate power and authority to issue and deliver
the Shares. The Shares have been duly authorized, and, when issued and delivered
to the Purchasers and paid for by the Purchasers in accordance with the terms of
the Purchase Agreement, and assuming that the representations made by each of
the Purchasers in the Transaction Documents are true and correct as of the dates
thereof and the date of issuance of the Shares, the Shares will be duly and
validly issued, fully paid and nonassessable. Except as set forth in Schedule
___ to the Disclosure Schedules of the Purchase Agreement, none of the Shares
will be issued in violation of any statutory or, to our knowledge, contractual
preemptive or other similar rights to subscribe for or purchase securities of
the Company upon the issuance and sale thereof.   6.   The execution and
delivery of the Transaction Documents by the Company, the performance by the
Company of its obligations thereunder and the issuance and sale of the Shares
(i) will not result in any violation of the provisions of the Charter or By-laws
of the Company; (ii) to our knowledge, will not constitute a breach of, or
default under, or result in the creation or imposition of any security interest,
mortgage, pledge, lien, charge, encumbrance or adverse claim upon any property
or assets of the Company, pursuant to any material agreement filed as an exhibit
to the SEC Reports, including, without limitation, under the Purchase Agreement;
(iii) to our knowledge, will not result in any violation of any federal or
California law or any administrative or court decree, applicable to the Company;
or (iv) to our knowledge, will not require any consent, approval, authorization
or other order of, or registration or filing with, any federal or state court or
other governmental or regulatory authority or agency, except (i) with respect to
the transactions contemplated by the Purchase Agreement as may be required under
the Securities Act and the Exchange Act, (ii) the filing of Form D with the
Commission; (iii) as required by the state securities or “blue sky” laws as to
which we express no opinion and (iv) for those which will be obtained prior to
closing or for which, to our knowledge, the failure to obtain could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

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7.   Assuming the accuracy of the representations and warranties of the Company,
the Purchasers contained in the Purchase Agreement and the compliance of such
parties with the agreements set forth therein (other than Section 3.1(n) of the
Purchase Agreement), it is not necessary, in connection with the issuance and
sale of any of the Shares as of the date hereof, in the manner contemplated by
Transaction Documents, to register the issuance of any of the Shares under the
Securities Act.   8.   Based on the Company’s certifications as to the use of
proceeds from the sale of the Shares, the Company is not, and after receipt of
payment for the Shares will not be, an “investment company” within the meaning
of the Investment Company Act.   9.   To our knowledge, the Company owns
directly all of the capital stock of each U.S. Subsidiary.

 

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EXHIBIT C-2
FORM OF OPINION OF PRC COUNSEL

1.   IAS Electronics (Shenzhen), Ltd (“IAS Shenzhen”) is duly formed and validly
existing under PRC Laws. To the best of our knowledge, it is not in default of
any registration, filing or licensing requirements under the PRC Laws. IAS
Shenzhen has passed the joint annual inspection conducted by the relevant
authorities in China in 2007 for the year of 2006. To the best of our knowledge,
at present, none of the businesses, activities of IAS Shenzhen is unauthorized
or exceeds the business scope of its business licenses.   2.   All of the
registered capital of IAS Shenzhen have been duly and validly authorized, fully
paid and non-assessable and are owned directly by International Assembly
Solutions Limited (Hong Kong), a company organized under the laws of Hong Kong
Special Administrative Region, free and clear of all liens, encumbrances,
equities or claims.   3.   To the best of our knowledge, we do not know of any
PRC legal or governmental proceedings pending or threatened to which the Company
or any of its Chinese subsidiaries is a party or to which any of the properties
of the Company or any of its Chinese subsidiaries is subject that are required
to be described in the SEC Reports of the Company and are not so described.

 

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EXHIBIT C-3
FORM OF OPINION OF HONG KONG COUNSEL

1.   International Assembly Solutions Limited (Hong Kong), a company organized
under the laws of Hong Kong (the “IAS HK”), has been duly incorporated and is
validly existing under the laws of Hong Kong, with corporate power and authority
to own its properties and conduct its business currently conducted and as
described in the SEC Reports of the Company. All of the issued share capital of
IAS HK has been duly authorized and validly issued and is owned directly by the
Company, free and clear of all liens, encumbrances, equities or claims.   2.  
All dividends or other distributions payable with respect to the shares of IAS
HK may, under the current laws and regulations of Hong Kong, be paid in the
lawful currency of Hong Kong and may be converted into U.S. dollars that may be
freely transferred out of Hong Kong.   3.   After due inquiry, we are not aware
of any legal or governmental proceedings pending or threatened in Hong Kong to
which the Company or any of its Chinese or Hong Kong subsidiaries is a party or
to which any of the properties of the Company or any of its Chinese or Hong Kong
subsidiaries is subject that are required to be described in the SEC Reports of
the Company and are not so described.

 

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EXHIBIT D
FORM OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
As of September ___, 2009
Computershare Trust Co.
[Address]
[Address]
Attn:                     
Ladies and Gentlemen:
           Reference is made to that certain Securities Purchase Agreement,
dated as of September ___, 2009 (the “Agreement”), by and among Solar Power,
Inc., a California corporation (the “Company”), and the purchasers named on the
signature pages thereto (collectively, and including permitted transferees, the
“Holders”), pursuant to which the Company is issuing to the Holders shares (the
“Shares”) of Common Stock of the Company, par value $0.0001 per share (the
“Common Stock”).
           This letter shall serve as our irrevocable authorization and
direction to you (provided that you are the transfer agent of the Company at
such time and the conditions set forth in this letter are satisfied), subject to
any stop transfer instructions that we may issue to you from time to time, if
any, to issue certificates representing shares of Common Stock upon transfer or
resale of the Shares.
           You acknowledge and agree that so long as you have received
(a) written confirmation from the Company’s legal counsel that either (1) a
registration statement covering resales of the Shares has been declared
effective by the Securities and Exchange Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “Securities Act”), or (2) the Shares
have been sold in conformity with Rule 144 under the Securities Act (“Rule 144”)
or are eligible for sale under Rule 144, without the requirement for the Company
to be in compliance with the current public information required under Rule 144
as to such securities and without volume or manner-of-sale restrictions and
(b) if applicable, a copy of such registration statement, then, unless otherwise
required by law, within three (3) Trading Days of your receipt of a notice of
transfer or a legended certificate representing Shares (endorsed or with stock
powers attached, signatures guaranteed, and otherwise in form necessary to
affect the reissuance and/or transfer), and an opinion of counsel to the extent
required, you shall issue the certificates representing the Shares registered in
the names of such Holders or transferees, as the case may be, and such
certificates shall not bear any legend restricting transfer of the Shares
thereby and should not be subject to any stop-transfer restriction; provided,
however, that if such Shares are not registered for resale under the Securities
Act or able to be sold under Rule 144 without the requirement for the Company to
be in compliance with the current public information required under Rule 144 as
to such securities and without volume or manner-of-sale restrictions, then the
certificates for such Shares shall bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED

 

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BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS
TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.
           A form of written confirmation from the Company’s outside legal
counsel that a registration statement covering resales of the Shares has been
declared effective by the Commission under the Securities Act is attached hereto
as Annex I.
           Please be advised that the Holders are relying upon this letter as an
inducement to enter into the Agreement and, accordingly, each Holder is a third
party beneficiary to these instructions.
           Please execute this letter in the space indicated to acknowledge your
agreement to act in accordance with these instructions.

                  Very truly yours,    
 
                SOLAR POWER, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:  
 
   
 
     
 
   

Acknowledged and Agreed:
COMPUTERSHARE TRUST CO.

         
By:
       
Name:
 
 
   
Title:
 
 
   
 
 
 
   

Date: September ___, 2009

 

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Annex I
FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT
   
Computershare Trust Co.
[Address]
[Address]
Attn:                     
           Re: Solar Power, Inc.
Ladies and Gentlemen:
              We are counsel to Solar Power, Inc., a California corporation (the
“Company”), and have represented the Company in connection with that certain
Securities Purchase Agreement, dated as of September ___, 2009, entered into by
and among the Company and the purchasers named therein (collectively, the
“Purchasers”) pursuant to which the Company issued to the Purchasers shares of
the Company’s common stock, $0.0001 par value per share (the “Common Stock”).
Pursuant to that certain Registration Rights Agreement of even date, the Company
agreed to register the resale of the Common Stock (collectively, the
“Registrable Securities”), under the Securities Act of 1933, as amended (the
“Securities Act”). In connection with the Company’s obligations under the
Registration Rights Agreement, on                     , 2009, the Company filed
a Registration Statement on [Form S-1][Form S-3] (File
No. 333-                    ) (the “Registration Statement”) with the Securities
and Exchange Commission (the “Commission”) relating to the Registrable
Securities which names each of the Purchasers as a selling stockholder
thereunder.
             In connection with the foregoing, we advise you that a member of
the Commission’s staff has advised us by telephone that the Commission has
entered an order declaring the Registration Statement effective under the
Securities Act at ___ [a.m.][p.m.] on                     , ___, and we have no
knowledge, after telephonic inquiry of a member of the staff, that any stop
order suspending its effectiveness has been issued or that any proceedings for
that purpose are pending before, or threatened by, the Commission and the
Registrable Securities are available for resale under the Securities Act
pursuant to the Registration Statement.
           This letter shall serve as our standing notice to you that the Common
Stock may be freely transferred by the Purchasers pursuant to the Registration
Statement. You need not require further letters from us to effect any future
legend-free issuance or reissuance of shares of Common Stock to the Purchasers
or the transferees of the Purchasers, as the case may be, as contemplated by the
Company’s Irrevocable Transfer Agent Instructions dated September ___, 2009,
provided at the time of such reissuance, the Company has not otherwise notified
you that the Registration Statement is unavailable for the resale of the
Registrable Securities. This letter shall serve as our standing instructions
with regard to this matter.

             
 
                Very truly yours,    
 
                Weintraub Genshlea Chediak Law Corporation    
 
           
 
  By:        
 
     
 
   

 

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EXHIBIT E
FORM OF SECRETARY’S CERTIFICATE
The undersigned hereby certifies that he is the duly elected, qualified and
acting Secretary of Solar Power, Inc., a California corporation (the “Company”),
and that as such he is authorized to execute and deliver this certificate in the
name and on behalf of the Company and in connection with the Securities Purchase
Agreement, dated as of September ___, 2009, by and among the Company and the
investors party thereto (the “Securities Purchase Agreement”), and further
certifies in his official capacity, in the name and on behalf of the Company,
the items set forth below. Capitalized terms used but not otherwise defined
herein shall have the meaning set forth in the Securities Purchase Agreement.

1.   Attached hereto as Exhibit A is a true, correct and complete copy of the
resolutions duly adopted by the Board of Directors of the Company or a duly
authorized Committee of the Board of Directors of the Company at a meeting of
the Board of Directors or Committee held on                     , 2009. Such
resolutions have not in any way been amended, modified, revoked or rescinded,
have been in full force and effect since their adoption to and including the
date hereof and are now in full force and effect.   2.   Attached hereto as
Exhibit B is a true, correct and complete copy of the Certificate of
Incorporation of the Company, together with any and all amendments thereto
currently in effect, and no action has been taken to further amend, modify or
repeal such Certificate of Incorporation, the same being in full force and
effect in the attached form as of the date hereof.   3.   Attached hereto as
Exhibit C is a true, correct and complete copy of the Bylaws of the Company and
any and all amendments thereto currently in effect, and no action has been taken
to further amend, modify or repeal such Bylaws, the same being in full force and
effect in the attached form as of the date hereof.   4.   Each person listed
below has been duly elected or appointed to the position(s) indicated opposite
his name and is duly authorized to sign the Securities Purchase Agreement and
each of the Transaction Documents on behalf of the Company, and the signature
appearing opposite such person’s name below is such person’s genuine signature.

          Name   Position   Signature
 
       
Stephen C. Kircher
  Chief Executive Officer    
 
       
 
       
Jeff Winzeler
  Chief Financial Officer    
 
       

IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this ___ day
of September, 2009.
                                                         
Secretary

 

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I, Stephen C. Kircher, Chief Executive Officer, hereby certify that Alan M.
Lefko is the duly elected, qualified and acting Secretary of the Company and
that the signature set forth above is his true signature.
                                                         
Chief Executive Officer

 

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EXHIBIT A
Resolutions

 

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EXHIBIT B
Certificate of Incorporation

 

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EXHIBIT C
Bylaws

 

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EXHIBIT F
FORM OF OFFICER’S CERTIFICATE
The undersigned, the Chief Executive Officer of Solar Power, Inc., a California
corporation (the “Company”), pursuant to Section 5.1(i) of the Securities
Purchase Agreement, dated as of September ___, 2009, by and among the Company
and the investors signatory thereto (the “Securities Purchase Agreement”),
hereby represents, warrants and certifies as follows (capitalized terms used but
not otherwise defined herein shall have the meaning set forth in the Securities
Purchase Agreement):

  1.   The representations and warranties of the Company contained in the
Securities Purchase Agreement are true and correct in all material respects
(except for those representations and warranties which are qualified as to
materiality, in which case, such representations and warranties shall be true
and correct in all respects) as of the date when made and as of the date hereof,
as though made on and as of such date, except for such representations and
warranties that speak as of a specific date.     2.   The Company has performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied
or complied with by it at or prior to the date hereof.

IN WITNESS WHEREOF, the undersigned has executed this certificate this ___ day
of September, 2009.
                                                         
Chief Executive Officer

 

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EXHIBIT G
WIRE INSTRUCTIONS
JPMorgan Chase Bank
ABA # 021000021
Account No.: 806026803
Account Name: Deutsche Bank/Solar Power Escrow

 

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ADDENDUM NO. 1 TO SECURITIES PURCHASE AGREEMENT
This Addendum No. 1 to the Securities Purchase Agreement (the “Addendum”) is
made as of September ___, 2009 by and between Solar Power, Inc., a California
corporation (the “Company”), and the Purchasers dated as of the date hereof by
and among the Company and the Purchasers (the “Agreement”). Capitalized terms
not specifically defined hereunder shall have the meanings assigned to them
under the Agreement.
1. Company Representations. A new Company representation as hereby added to the
Agreement at Section 3.1(jj), and shall read in its entirety as follows:

  (jj)   Based upon prior operations and review of its reports, the Company
believes that it is not a “shell company” as that term is defined in Rule 405.

2. Removal of Legends. For clarity, the Company confirms that it will pay
transfer agent and DTC fees for legend removal.
3. Additional Issuance of Securities. Section 4.14(i)(3) is amended so that item
(iii) therein shall require that any bona fide firm commitment underwritten
offering with a nationally recognized underwriter which generates gross proceeds
to the Company in excess of $50,000,000 (other than “equity lines”), in order to
be excluded securities.
4. Per Share Purchase Price Protection. A new Section 4.16 is hereby added to
the Agreement to provide for adjustment in purchase price in the event the
Company sells securities within a twelve month period from the Closing at a per
share price that is lower than the per share price paid by the Purchasers
pursuant to the Agreement. Section 4.16 shall read in its entirety as follows:
     "4.16 Anti-dilution.
     (a) If at any time after the Closing and prior to the first anniversary of
the Closing, the Company sells or issues or agrees to sell or issue Dilutive
Shares (as defined below) to any person or entity for consideration per share
that is less than the Trigger Price (as defined below) in effect immediately
prior to such issuance or sale (each, a “Dilutive Issuance”), the Company shall
concurrently, at the option of the Company, either (A) issue to Purchaser for no
consideration a number of shares of Common Stock equal to (i) Purchaser’s
Adjusted Shares (as defined below) less (ii) Purchaser’s Original Shares (as
defined below) (the “Anti-Dilution Shares”), or (B) pay to Purchaser an amount
in cash equal to the product of (x) an amount equal to the Trigger Price
immediately prior to such Dilutive Issuance less the consideration per share
paid in respect of such Dilutive Shares multiplied by (y) Purchaser’s Original
Shares. For purposes of this Section 4.16, such shares shall be allocated a
portion of the consideration of the initial issuance of Common Stock pursuant to
the Agreement. No fractional shares of Common Stock shall be issued pursuant to
this Section 4.16. The number of shares of Common Stock issued shall be rounded
up or down to the nearest integral number of whole shares of Common Stock. For
the purposes of this Section 4.16, whenever Dilutive Shares are issued for a
consideration other than cash, either in whole or in part, the consideration per
share paid in respect of such Dilutive Shares shall be the fair market

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value of such consideration as established in good faith by resolution of the
Company’s board of directors.
     (b) Definitions. For the purposes of this Section 4.16, for each Dilutive
Issuance, the following terms shall have the following meanings:
     (i) “Adjusted Shares” means the number of shares of Common Stock equal to
the product of (x) the Purchaser’s Original Shares, multiplied by (y) the
quotient of (1) the Trigger Price in effect immediately prior to a Dilutive
Issuance, divided by (2) the Trigger Price in effect immediately after such
Dilutive Issuance.
     (ii) “Common Equivalent Shares” means shares of Common Stock issuable upon
conversion, exercise or exchange of Convertible Securities.
     (iii) “Convertible Securities” for purposes of this Section 4.16 only means
any stock or securities convertible into or exercisable or exchangeable for
Common Stock, including rights, warrants or options to subscribe for or purchase
Common Stock or Convertible Securities.
     (iv) “Dilutive Shares” means shares of Common Stock or Common Equivalent
Shares issued and sold at a price per share less than the Trigger Price after
the Closing and prior to the first anniversary of the Closing other than:
     (A) shares of Common Stock issued upon conversion of any warrant or option
in accordance with its terms, which warrant or option was outstanding as of the
Closing, and including warrants to be issued to the placement agents in
connection with the sale of the Securities;
     (B) shares of Common Stock and options to purchase Common Stock granted
pursuant to the Company’s 2006 Equity and Incentive Plan, and shares of Common
Stock issued upon exercise of any such options;
     (C) shares of Common Stock or Convertible Securities issued upon exercise,
conversion or exchange of any Convertible Securities existing as of the Closing;
     (D) shares of Common Stock (and/or Convertible Securities and the shares of
Common Stock issuable upon conversion, exchange or exercise of such Convertible
Securities) issued in connection with any stock split, stock dividend, reverse
stock split, recapitalization, reorganization or other distribution of shares of
Common Stock (each, a “Recapitalization Event”) that does not affect the
relative economic interests or rights of holders of Common Stock; and/or
     (E) Common Stock or Convertible Securities issued as part of any offering
registered under the Securities Act (“Public Offering”).

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     For purposes of this Clause (iv), Common Equivalent Shares are deemed to be
issued and sold when Convertible Securities are issued and sold, and the price
per share at which such Common Equivalent Shares are deemed to be issued and
sold shall equal the initial conversion, exercise, subscription, purchase or
exchange price per share, as the case may be, of the Common Stock underlying
such Convertible Securities, rights (as set forth in the instrument relating
thereto without regard to any provisions contained therein designed to protect
against dilution).
     (v) “Original Shares” means (x) with respect to the first Dilutive
Issuance, the total number of Common Shares acquired by Purchaser pursuant to
the Agreement (as adjusted for any Recapitalization Event) and (y) with respect
to each Dilutive Issuance thereafter, the total number of Adjusted Shares
immediately prior to such Dilutive Issuance (as adjusted for any
Recapitalization Event). For the avoidance of doubt, any Common Shares acquired
by Purchaser or an affiliate of Purchaser from either the Company or any other
stockholder of the Company under any contract other than this Agreement shall in
no event be included in the number of Original Shares under this Section 4.16 or
any adjustment pursuant to this Section 4.16.
     (vi) “Trigger Price” shall initially mean (A) $1.00 per share (as adjusted
for any Recapitalization Event). In connection with each Dilutive Issuance, the
Trigger Price shall be adjusted downwards to equal the lowest price per Dilutive
Share paid for the Dilutive Shares issued or sold in such Dilutive Issuance. The
Trigger Price shall also be proportionately adjusted from time to time for any
Recapitalization Event pursuant to which securities of the Company are issued
with respect to the Original Shares and/or Adjusted Shares.
     (c) Notwithstanding anything herein to the contrary, if the Company has not
obtained shareholder approval, if required by the applicable rules and
regulations of the principal Trading Market (or any successor entity) upon which
the Company’s shares of Common Stock are listed or quoted, then the Company may
not issue under this Section 4.16, in the aggregate, in excess of (1) 19.999% of
the number of shares of Common Stock outstanding as of the date hereof, less
(2) the sum of (a) the Common Shares issued at the Closing and any shares of
Common Stock issued at the closing of a subsequent financing plus (b) any
Anti-Dilution Shares (such number of shares, the “Issuable Maximum”). Each
Purchaser shall be entitled to a portion of the Issuable Maximum equal to the
quotient obtained by dividing (x) the aggregate number of Common Shares issued
and sold to such Purchaser on the Closing by (y) the aggregate number of shares
of Common Stock issued and sold by the Company on the closing of the subsequent
financing. Any remainder over the Issuable Maximum shall be paid by the Company
in cash or other consideration acceptable to the Purchaser.
     (d) The Purchasers agree that any term or provision of the Agreement or
this Addendum may be modified by consent of those Purchasers who hold a majority
of the outstanding Common Shares issued pursuant to the Agreement at the time of
such consent, which modification shall be binding on all Purchasers.

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