--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

THIRD AMENDMENT TO THE AGREEMENT AND
PLAN OF MERGER

This Third Amendment to the Agreement and Plan of Merger (the “Amendment”) is
entered into as of December 21, 2006 to be effective as of August 23, 2006, by
and among Solar Power, Inc., a California corporation (“SPI”), Solar Power,
Inc., a Nevada corporation formerly known as Welund Fund, Inc. (the “Company”)
and Welund Acquisition Corp., a Nevada corporation and a wholly-owned subsidiary
of the Company (the “Merger Sub”). SPI, Company and Merger Sub also collectively
referred to herein as the “Parties.”
 
RECITALS

WHEREAS, SPI, the Company and the Merger Sub are parties to that certain
Agreement and Plan of Merger dated August 23, 2006, as amended by that certain
First Amendment to the Agreement and Plan of Merger dated October 4, 2006 and as
further amended by the Second Amendment to the Agreement and Plan of Merger
dated December 1, 2006 (the “Merger Agreement”).

WHEREAS, the Merger Agreement provides that the “Final Date” (as defined in the
Merger Agreement) can be extended by mutual consent and the parties have
extended the Final Date to January 5, 2007 by mutual consent on December 21,
2006.

WHEREAS, SPI, the Company and the Merger Sub desire to amend the Merger
Agreement to reflect the extension of the Final Date to January 5, 2007.

WHEREAS, SPI has indicated to the Company that they are in the final stages of
resolving any remaining issues with the auditors in connection with SPI’s
audited financial statements.

WHEREAS, SPI, the Company and the Merger Sub also desire to clarify their intent
that all outstanding stock options of SPI shall at the Effective Time (as
defined in the Merger Agreement) be substituted for stock options issued under
the Company’s 2006 Equity Incentive Plan.

WHEREAS, the capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Merger Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises, the mutual
agreements set forth below, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:

1.      Final Date. The last sentence of Section 10.1 of the Merger Agreement is
hereby amended as follows:

“As used herein, the “Final Date” shall be January 5, 2007 or as otherwise
extended by mutual consent.”

2.      SPI’s Stock Option Plan and Options. Section 2.1(b)(v) of the Merger
Agreement is hereby amended as follows:

 
1

--------------------------------------------------------------------------------

 

“(v)  At the Effective Time, each holder of then outstanding options to purchase
or otherwise acquire shares of SPI (“SPI Option”), whether or not such SPI
Option is then exercisable, issued pursuant to the SPI 2006 Equity Incentive
Plan (“SPI Option Plan”) or otherwise, will be granted awards under the
Company's 2006 Equity Incentive Plan ("Company Option Plan") in substitution for
awards issued under the SPI Option Plan (the “Substituted Option”). The Company
Option Plan is substantially similar in all material respects to the SPI Option
Plan and each Substituted Option shall continue to have, and be subject to,
substantially similar terms and conditions set forth in such option and, if
applicable, in the SPI Option Plan, immediately before the Effective Time,
including provisions with respect to vesting (except as amended to terminate
vesting provisions), except that each Substituted Option will be exercisable for
that number of shares of common stock of the Company, $.0001 par value, equal to
the number of shares of SPI common stock that were issuable upon the exercise of
such option immediately before the Effective Time. The duration and others terms
of each Substituted Option shall be the same as the original option, including
the exercise price for such shares, which shall also remain the same, provided
however, all references to SPI shall be deemed to be references to the Company.

The Company shall take all corporate action necessary to reserve for issuance a
sufficient number of shares of Company’s Common Stock for delivery upon the
exercise of Substituted Options.”  

3.    Effect of Amendment. Except as expressly modified by the provisions
hereof, the Merger Agreement is in all respects ratified and confirmed, and
shall continue in full force and effect in accordance with its terms. To the
extent that there are any inconsistencies between this Amendment and the Merger
Agreement, the terms and provisions of this Amendment shall prevail.

4.    Entire Agreement. The Merger Agreement and this Amendment, taken as a
whole, shall supersede any and all agreements, either oral or written, between
the Parties with respect to its subject matter.
 
5.    Counterparts. This Amendment may be executed in one or more counterparts
(including by facsimile) each of which when so executed will be deemed an
original and all of which, when taken together, will constitute one and the same
agreement.
 

SIGNATURE PAGE IMMEDIATELY FOLLOWS

 
2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date
first above written.

 
SOLAR POWER, INC., a California corporation
         
By: /s/ Stephen C. Kircher                     
 
Name: Stephen C. Kircher
 
Title: Chief Executive Officer and Chairman of Board
         
SOLAR POWER, INC., formerly WELUND FUND, INC., a Nevada corporation
         
By: /s/ Terrell W. Smith                         
 
Name: Terrell W. Smith
 
Title: Vice President and Treasurer 
         
WELUND ACQUISITION CORP., a Nevada corporation
         
By: /s/ Terrell W. Smith                         
 
Name: Terrell W. Smith
 
Title: President

 
 
 
 
 
 
 
 
 
 
 
3 

--------------------------------------------------------------------------------