Exhibit 10.56

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (the “Agreement”) is made effective as of
September 15, 2014 (the “Effective Date”) by and between Solar Power, Inc., a
California corporation (“Buyer”), and Hawaiian Power, LLC, a California limited
liability company (“Seller”)(each a “Party” and collectively, the “Parties”).

 

1.     Background and Purpose. Seller wishes to sell to Buyer, and Buyer desires
to purchase from Seller, all right, title and interest in and to certain assets
of Seller in certain entities and projects related to Solar Hub Utilities, LLC
(“SHU”), on the terms and conditions contained in this Asset Purchase Agreement
("Agreement").

 

2.     Sale and Purchase. Subject to the terms and conditions set forth in this
Agreement, Seller sells, conveys and transfers to Buyer and Buyer purchases from
Seller, the Assets (as defined below) upon and subject to the terms and
conditions set forth in this Agreement.

 

3.     Assets. The assets to be sold and purchased are, including but not
limited to, the following ("Assets"):

 

(a)     All of the membership interest owned by Seller in Calwaii Power
Holdings, LLC, a Delaware limited liability company (“Calwaii”);

 

(b)      All of the partnership interest owned by Seller and Hawaiian Power GP,
LLC in JP Energy Partners, LP, an Arizona limited partnership (“JP Energy”);

 

(c)     The amended and restated secured promissory note dated March 13, 2013 in
the original amount of $7,500,000 by SHU as maker in favor of Seller, including
all principal and interest due under such note (“Seller Note”); and

 

(d)      Any and all rights, title and interest of Seller in any other assets
related to SHU or any SHU subsidiary or affiliate, the projects and other assets
of SHU, and Calwaii, its subsidiaries, affiliates and assets.

 

4.     Purchase Price and Payment. In exchange for the Assets, Buyer shall pay
to Seller Three Million Nine Hundred and Fifty Thousand Dollars ($3,950,000) to
be paid as follows: (i) One Hundred Thousand Dollars ($100,000) cash to be
delivered to Seller on the first business day of each month for a period of five
(5) months commencing on October 1, 2014 and (ii) Three Million Four Hundred and
Fifty Thousand Dollars ($3,450,000) shall be paid in common stock of Buyer at a
price per share equal to $1.15, subject to adjustment as set forth in Section 5
below. Buyer shall issue a stock certificate for the number of shares to be
issued hereunder within five (5) business days from the Closing Date.

 

5.     Purchase Price Adjustment. If the dollar volume-weighted average price
(“VWAP”) for Buyer’s common stock on the principal market on which it trades is
less than $1.00 (as equitably adjusted for subsequent stock splits, stock
combinations, stock dividends and recapitalizations as necessary) for the five
(5) trading days ending on March 30, 2015, then Buyer shall issue Seller
additional shares of Buyer’s common stock so that the total number of shares
issued by Buyer under this Agreement multiplied by the five (5) trading day VWAP
will have a value of at least Three Million Dollars ($3,000,000) on March 30,
2015. Buyer shall issue a stock certificate for the number of additional shares
to be issued due to the purchase price adjustment within five (5) business days
from March 30, 2015.

  

 
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6.     Closing; Conditions Precedent.

 

6.1.     Possession of and title to the Assets shall be given to Buyer on the
Effective Date, or such other date as agreed to by Buyer and Seller in writing
(“Closing Date").

 

6.2.     Buyer shall have delivered to Seller, and Seller shall have delivered
to Buyer, those items required to be delivered under Section 7.

 

7.     Deliveries Required on the Closing Date. On the Closing Date:

 

(a)     Seller shall deliver to Buyer all documents and instruments reasonably
necessary to carry out the terms and provisions of this Agreement and to
effectuate the purpose of the transaction.

 

(b)     Seller shall deliver to Buyer an Assignment of Interest for all of
Seller’s interest in Calwaii and JP Energy in substantially the form attached
hereto as Exhibit A (“Assignment of Interest”).

 

(c)     Seller shall deliver to Buyer an Assignment of Seller’s Note in
substantially the form attached hereto as Exhibit B (“Assignment of Note”).

 

(d)     Buyer shall deliver to Seller all documents and instruments reasonably
necessary to carry out the terms and provisions of this Agreement and to
effectuate the purpose of the transaction.

 

8.     Representations and Warranties by Seller. Seller represents, agrees and
warrants that:

 

(a)      Seller has all requisite power and authority to enter into and perform
and carry out this Agreement;

 

(b)      The execution, delivery and performance of this Agreement by Seller has
been duly and validly authorized by all requisite corporate action on the part
of Seller;

 

(c)     Seller owns and holds all right, title and interest in and to the Assets
and has not sold, assigned, encumbered, compromised, waived, released or
otherwise transferred any right or interest therein, and the Assets are free and
clear of any liens or encumbrances of any kind;

 

(d)     The sale of the Assets by Seller does not constitute a fraudulent
conveyance;

 

(e)     Seller is not aware of any facts that have arisen or that are likely to
arise that may materially adversely affect the Assets;

 

(f)     Seller is the sole legal, beneficial, record and equitable owner of the
membership interests owned by Seller in Calwaii and the partnership interests
owned by Seller in JP Energy, free and clear of all encumbrances whatsoever;

 

(g)     There is no claim, action, suit, proceeding or governmental
investigation ("Action") of any nature pending or, to Seller's knowledge,
threatened against or by Seller (a) relating to or affecting the membership
interests owned by Seller in Calwaii or the partnership interest owned by Seller
in JP Energy; or (b) that challenges or seeks to prevent, enjoin or otherwise
delay the transactions contemplated by this Agreement; or (c) that challenges
the enforceability of the Seller Note. No event has occurred or circumstances
exist that may give rise to, or serve as a basis for, any such Action;          

  

 
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(h)     No consent, approval, waiver or authorization is required to be obtained
by Seller from any person or entity (including any governmental authority) in
connection with the execution, delivery and performance by Seller of this
Agreement and the consummation of the transactions contemplated hereby;

 

(i)     That (i) the shares of Buyer’s common stock to be issued to Seller
hereunder (collectively, the “Buyer Shares”) have not been registered under the
Securities Act of 1933, nor qualified under the securities laws of any other
jurisdiction, (ii) the Buyer Shares cannot be resold unless they subsequently
are registered under the Securities Act of 1933 and qualified under applicable
state securities laws or foreign securities laws, unless exemptions from such
registration and qualification requirements are available, (iii) Seller has no
right to require such registration or qualification, and (iv) the certificates
representing the Buyer Shares to be issued hereunder shall bear the following
legend:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”). THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT COVERING SUCH SECURITIES, OR (B) A VALID EXEMPTION THEREFROM AND
THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES
REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE SECURITIES ACT.”

 

(j)      The Buyer Shares to be received by the Seller pursuant to this
Agreement will be acquired for Seller’s own account and not with a view to, or
intention of, distribution thereof in violation of the Securities Act on 1933,
any applicable state securities laws or foreign securities laws, and the Buyer
Shares will not be disposed of in contravention of the Securities Act of 1933 or
any applicable state securities laws or foreign securities laws;

 

(k)     Seller is an “accredited investor” as defined in Regulation D under the
Securities Act of 1933, as amended.

 

(l)     For each of the thirty (30) days ending on September 12, 2014 and on
March 30, 2015, Seller has not (i) offered, pledged, sold, contracted to sell,
granted any option or contract to purchase, purchased any option or contract to
sell, or otherwise disposed of, directly or indirectly, any shares of common
stock of Buyer or any securities convertible into, exercisable for, or
exchangeable for shares of common stock of Buyer (ii) entered into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the common stock of Buyer, whether any
such transaction described in clause (i) or (ii) above is to be settled by
delivery of common stock or such other securities, in cash or otherwise.

 

(m)     The Assets are all of the assets of Seller or its affiliates related to
SHU or any SHU subsidiary or affiliate, the projects and other assets of SHU,
and Calwaii, its subsidiaries, affiliates and assets.

 

(n)     To Seller’s knowledge, JP Energy owns and holds all right, title and
interest in and to an 89% membership interest in SHU, and Seller has not sold,
assigned, encumbered or otherwise transferred any right or interest therein.

  

 
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(o)     Seller has carefully reviewed and understands the risks of, and other
considerations relating to, an investment in the Buyer Shares; and

 

(p)     None of the representations and warranties made by Seller in this
Agreement, in any of the exhibits, or in any other documents furnished for
review to Buyer contain any untrue statement of a material fact, or omit any
material facts necessary to prevent the statements made from being misleading.

 

9.     Representations and Warranties by Buyer. Buyer represents and warrants
that (i) Buyer has all requisite power and authority to enter into and perform
and carry out this Agreement, and (ii) the execution, delivery and performance
of this Agreement by Buyer has been duly and validly authorized by all requisite
action on the part of Buyer.

 

10.     Project Management. Ian Craig shall continue to provide project
management services to SHU until December 31, 2014 at the sole cost of Seller.
Buyer shall have the right to negotiate with Ian Craig with regard to providing
management services following December 31, 2014.

 

11.     Indemnification.

 

11.1.     By Seller. Seller shall indemnify, defend and hold Buyer harmless from
any loss, cost, liability, claim, expense, penalty or fine, including attorneys'
fees (without regard to whether litigation is commenced) suffered or incurred,
directly or indirectly, as a result of any material breach of any of Seller's
representations, warranties, covenants or obligations contained in this
Agreement. Buyer shall promptly notify Seller of the existence of any matter to
which the indemnification obligations would apply and shall give Seller a
reasonable opportunity to defend such matters at Seller's own expense and with
counsel of Seller's own selection; provided that Buyer shall at all times also
have the right to fully participate in the defense at Buyer's own expense.

 

11.2.     By Buyer. Buyer shall indemnify, defend and hold Seller harmless from
any loss, cost, liability, claim, expense, penalty or fine, including attorneys'
fees (without regard to whether litigation is commenced) suffered or incurred,
directly or indirectly, as a result of (a) any material breach by Buyer of any
of Buyer's representations, warranties, covenants or obligations contained in
this Agreement or (b) the ownership, use, development, or operation of the
Assets from and after the Closing Date. Seller shall promptly notify Buyer of
the existence of any matter to which the indemnification obligations would apply
and shall give Buyer a reasonable opportunity to defend such matters at Buyer's
own expense and with counsel of Buyer's own selection; provided that Seller
shall at all times also have the right to fully participate in the defense at
Seller's own expense.

 

12.     Waiver and Release. Except for the representations, warranties,
covenants and obligations that are expressly set forth in this Agreement, each
of the Parties for itself, its successors-in-interest, and each of its officers,
directors, employees, partners, members, shareholders, attorneys and agents, and
their respective heirs, executors, successors and assigns (collectively, the
“Releasing Parties”), forever, absolutely, unconditionally and completely
releases and discharges each of the other Parties and each of their managers,
officers, employees, partners, members, shareholders, beneficiaries, attorneys
and agents, and each of their respective heirs, executors, successors and
assigns (collectively, the “Released Parties”) from and against any and all
actual, threatened or potential claims, suits, proceedings, actions, causes of
action, demands, liabilities, losses, obligations, orders, requirements or
restrictions, liens, penalties, fines, charges, debts, damages, costs, and
expenses of every kind and nature, whether now known or unknown, whether
foreseeable or unforeseeable, whether under any foreign, federal, state or local
law (collectively, the “Claims”), whether asserted or demanded by a third party
against any of the Releasing Parties or incurred directly or indirectly by any
of the Releasing Parties themselves, that any of the Releasing Parties may now
or hereafter have against any of the Released Parties, and that are related to
or arise out of the Assets

  

 
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With respect to the released Claims only, each Party hereto hereby expressly
waives the provisions of section 1542 of the Civil Code of the State of
California which provides as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER, MUST HAVE A MATERIAL EFFECT ON HIS OR HER SETTLEMENT
WITH THE DEBTOR.”

 

By executing this Agreement, each Party acknowledges that it understands the
provisions of California Civil Code Section 1542 and that if the facts with
respect to the Releases are hereafter found to be different from the facts now
believed to be true from whatever cause or for whatever reason that it shall
nonetheless be bound by this waiver and the Releases of the released Claims.
Each of the Parties agrees and assumes the risks of such possible differences in
fact and agree that this waiver and the Releases of the released Claims shall
remain valid and enforceable and be in effect notwithstanding any such
difference.

 

13.     Miscellaneous.

 

13.1.     Survival of Representations. Each representation and warranty
contained in this Agreement or made pursuant to this Agreement shall be deemed
to be material and to have been relied upon, and shall survive the execution and
delivery of this Agreement, any investigation at any time made by or on behalf
of any party to this Agreement, and the transfer of and payment for the Assets
for a period of one (1) year.

 

13.2.     Entire Agreement. This document and its exhibits constitute the entire
agreement between the parties, all oral agreements being merged in this
Agreement, and supersede all prior representations. There are no
representations, agreements, arrangements, or understandings, oral or written,
between or among the parties relating to the subject matter of this Agreement
that are not fully expressed in this Agreement.

 

13.3.     Amendment. The provisions of this Agreement may be modified at any
time by agreement of the parties. Any such agreement shall be ineffective to
modify this Agreement in any respect unless in writing and signed by the
parties.

 

13.4.     Waiver. Any of the terms or conditions of this Agreement may be waived
at any time by the party entitled to the benefit thereof, but no such waiver
shall affect or impair the right of the waiving party to require observance,
performance or satisfaction either of that term or condition as it applies on a
subsequent occasion or of any other term or condition.

 

13.5.     Succession. Subject to the provisions otherwise contained in this
Agreement, this Agreement shall inure to the benefit of and be binding on the
successors and permitted assigns of the respective parties.

 

13.6.     Notices. Any notice under this Agreement shall be in writing, and any
written notice or other document shall be deemed to have been duly given (i) on
the date of personal service on the parties, (ii) on the third business day
after mailing, if the document is mailed by registered or certified mail,
(iii) one day after being sent by professional or overnight courier or messenger
service guaranteeing one-day delivery, with receipt confirmed by the courier, or
(iv) on the date of transmission if sent by telegram, telex, telecopy or other
means of electronic transmission resulting in written copies, with receipt
confirmed.

  

 
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13.7.     Attorneys' Fees; Prejudgment Interest. If the services of an attorney
are required by any party to secure the performance of this Agreement or
otherwise upon the breach or default of another party to this Agreement, or if
any judicial remedy or arbitration is necessary to enforce or interpret any
provision of this Agreement or the rights and duties of any person in relation
thereto, the prevailing party shall be entitled to reasonable attorneys' fees,
costs and other expenses, in addition to any other relief to which such party
may be entitled. Any award of damages following judicial remedy or arbitration
as a result of the breach of this Agreement or any of its provisions shall
include an award of prejudgment interest from the date of the breach at the
maximum amount of interest allowed by law.

 

13.8.     Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of the
Agreement which can be given effect without the invalid provision shall continue
in full force and effect and shall in no way be impaired or invalidated.

 

13.9.     Exhibits. All exhibits to which reference is made are deemed
incorporated in this Agreement whether or not actually attached.

 

13.10     Governing Law. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law. All parties
consent to the exclusive jurisdiction and venue in Sacramento, California.

 

13.11     Further Assurances. From and after the Closing Date, each party agrees
to execute and deliver such other assurances, deeds, instructions, instruments
of transfer and other documents as may be reasonably requested by the other
party to carry out the purpose and intent of this Agreement.

 

13.12     Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties hereto and delivered to the other parties hereto, it being
understood that all parties hereto need not sign the same counterpart.

 

 

[Signature Page to Follow]

 

 
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SELLER:

 

HAWAIIAN POWER, LLC

 

By: /s/ Jack Sweigart

Its: Manager

Address: 401 Watt Avenue, Suite 2

  Sacramento, CA 95864

BUYER:

 

SOLAR POWER, INC.

 

By: /s/ Min Xiahou

Its: Chief Executive Officer

Address: 3400 Douglas Blvd., Suite 285

                 Roseville, CA 95661

 

 

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