Unassociated Document


    
      

      

    

    

      Exhibit
        10.30

      


      


      


      


      


      


      


      ASSIGNMENT
        AND INTERIM OPERATING AGREEMENT

      


      BY
        AND AMONG

      


      SOLAR
        POWER, INC.,

      


      DALE
        STICKNEY CONSTRUCTION, INC.

      


      AND

      


      DALE
        RENEWABLE CONSULTING, INC.

      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      



      
        
           

        

        
           

          
            

          

        

        
           

        

      


      ASSIGNMENT
        AND INTERIM OPERATING AGREEMENT

      


      This
        Assignment and Interim Operating Agreement (this "Agreement") is entered
        into as
        of August 20, 2006 (the "Effective Date"), by and among Solar Power, Inc.,
        a
        California corporation (“SPI”); Dale Stickney Construction, Inc. a California
        corporation ("DSCI"); and Dale Renewable Consulting, Inc., a California
        corporation (“DRCI"). SPI, DSCI, and DRCI are referred to individually herein as
        a "Party" and collectively herein as the “Parties.” 

      


      RECITALS

      


      WHEREAS,
        SPI and DRCI have entered into an Agreement and Plan of Merger dated as of
        even
        date herewith whereby DRCI shall merge with and into SPI and SPI shall become
        the surviving company (the “Merger”);

      


      WHEREAS,
        under the Agreement and Plan of Merger, SPI granted certain franchise operating
        rights to certain DRCI stockholders;

      


      WHEREAS,
        DRCI is an Affiliate (as defined hereunder) of DSCI and beneficiary of certain
        contracts owned by DSCI, and DSCI desires to assign and transfer, and DRCI
        agrees to assume such contracts; and 

      


      WHEREAS,
        pursuant to the Agreement and Plan of Merger, SPI will assume operational
        control of DRCI pending consummation of the Merger, and provide all management
        services, including payables and revenues, management, budgeting, and advisory
        services as provided herein.

      


      AGREEMENT

      


      Now,
        therefore, in consideration of the premises and the mutual promises herein
        made,
        and in consideration of the representations, warranties, and covenants herein
        contained, the Parties agree as follows. 

      


      
        	 	
                1.

              	
                Definitions

              


      

      


      “Adverse
        Consequences” means all actions, suits, proceedings, hearings, investigations,
        charges, complaints, claims, demands, injunctions, judgments, orders, decrees,
        rulings, damages, dues, penalties, fines, costs, amounts paid in settlement,
        liabilities, obligations, taxes, liens, losses, expenses, and fees, including
        court costs and reasonable attorneys’ fees and expenses.

       

      “Affiliate”
        shall have the meaning set forth in Rule 12b-2 of the regulations promulgated
        under the Securities Exchange Act of 1934, as amended, and the rules and
        regulations promulgated thereunder.

       

      “Best
        Efforts” means the efforts that a prudent person desirous of achieving a result
        would use in similar circumstances to ensure that such result is achieved
        as
        expeditiously as possible.

       

      “Business”
        means any installation, integration and sales related to the photovoltaic
        business.

      “Closing
        Date” means the date the Merger transaction is consummated.

      


      “Confidential
        Information” means all information regarding DRCI, its activities, business or
        clients that is the subject of reasonable efforts by DRCI to maintain its
        confidentiality and that is not generally disclosed by practice or authority
        to
        persons not employed by DRCI, but that does not rise to the level of a Trade
        Secret. “Confidential Information” shall include, but is not limited to, DRCI 's
        customer and client lists, DRCI’s financial statements, budgets and forecast,
        confidential information provided by customers and prospective customers,
        DRCI
        's business strategies and plans (including any merger or acquisition plans),
        DRCI 's operational methods, DRCI 's compensation information on employees,
        DRCI
        's fee arrangements with customers and vendors, DRCI 's market studies and
        marketing plans and any of DRCI 's product development techniques or plans.
        “Confidential Information” shall not include information that has become
        generally available to the public by the act of one who has the right to
        disclose such information without violating any right or privilege of DRCI.
        This
        definition shall not limit any definition of “confidential information” or any
        equivalent term under state or federal law. 

      



      
        
           

        

        
          1

          
            

          

        

        
           

        

      


      "Continuing
        Business" means, for the purpose of tracking the revenue and operational
        profits, the Business of DRCI from the Measurement Date until its termination
        pursuant to this Agreement.

      


      “Effective
        Time” means the date the Merger becomes effective with the Secretary of State of
        the State of California.

      


      “Future
        Franchise Area” means that area in Northern California comprised of three
        proposed future SPI franchise territories, as more specifically described
        in the
        Agreement and Plan of Merger, which is incorporated herein by reference.
        

      


      “Interim
        Operating Period” means the period from the Measurement Date until the Closing
        Date. 

      


      "Law"
        means any federal, state, local, foreign, multinational, stock exchange or
        securities market statute, law, ordinance, regulation, rule, code, governmental
        order, governmental approval, decree, treaty, decision, constitution or other
        requirement or rule of law.

      


      “Measurement
        Date” means June 1, 2006.

      


      “Ordinary
        Course of Business” means the ordinary course of business consistent with past
        custom and practice (including with respect to quantity and frequency) as
        it
        relates to the business and operations of DRCI.

      


      “PV”
        means photovoltaic. 

      


      “Restricted
        Period” means a period of two (2) years following the Effective
        Time.

      


      “Security
        Interest” means any mortgage, pledge, lien, encumbrance, charge, or other
        security interest, other than (a) mechanic’s, materialman’s, and similar liens,
        (b) liens for taxes not yet due and payable, and (c) purchase money liens
        and
        liens securing rental payments under capital lease arrangements.

      


      “Territory”
        means California and northern Nevada. 

      


      “Trade
        Secrets” means all secret, proprietary or confidential information regarding
        DRCI or DRCI activities that fits within the definition of “trade secrets” under
        the California Uniform Trade Secrets Act, including but not limited to all
        information, without regard to form, such as, technical or nontechnical data,
        a
        formula, a pattern, a compilation, a program, a device, a method, a technique,
        a
        drawing, a process, financial data, financial plans, product plans, distribution
        lists or a list of actual or potential customers, advertisers or suppliers
        which
        is not commonly known by or available to the public and which information:
        (A) derives economic value, actual or potential, from not being generally
        known to, and not being readily ascertainable by proper means by, other persons
        who can obtain economic value from its disclosure or use; and (B) is the
        subject of efforts that are reasonable under the circumstances to maintain
        its
        secrecy. “Trade Secrets” shall not include information that has become generally
        available to the public by the act of one who has the right to disclose such
        information without violating any right or privilege of DRCI. This definition
        shall not limit any definition of “trade secrets” or any equivalent term under
        the California Uniform Trade Secrets Act or any other state, local or federal
        law.

      



      
        
           

        

        
          2

          
            

          

        

        
           

        

      


      2.   Operations,
        Accounting, Management and Project Management.
        Except
        as set forth below, SPI shall not be responsible for any expenses related
        to
        DRCI or DSCI unless approved by SPI in writing.

      


      (a)    Operating
        Expenses.
        During
        the Interim Operating Period, SPI shall be responsible for the following
        operating expenses:

      


      (i)    Payroll
        for the following employees of DRCI: Todd Lindstrom, Kirk Uhler, Perry Kostas,
        Drew Newman, Peter Krysinski and any other DRCI staff hired during the Interim
        Operating Period with the written consent of SPI.

      


      (ii)   All
        DRCI
        expenses associated with PV inventory, including panels, inverters, racking
        and
        related Balance of System (BOS) equipment. 

      


      (b)    Purchase
        Procedures.
        All PV
        inventory purchasing by or on behalf of DSCI or DRCI will be coordinated
        with
        and arranged through SPI and shall be initiated by SPI with a purchase
        order.

       

      (c)    Revenue
        Allocation.
        All PV
        contract revenues shall be allocated as follows:

       

      (i)    PV
        contract revenue received by DSCI between the Measurement Date and the Effective
        Date for work performed after the Measurement Date and before the Effective
        Date, shall be credited to or otherwise distributed by DSCI to SPI at the
        Closing Date. 

       

      (ii)   PV
        contract revenue received by DSCI after the Effective Date for work performed
        after the Measurement Date shall be distributed by DSCI to SPI. DSCI shall
        use
        best efforts to forward all such revenues within two (2) business days of
        receipt; provided, however, all such revenues shall be forwarded from DSCI
        to
        DRCI no later than five (5) business days of receipt by DSCI.

       

      (d)    Payables
        Management.
        All PV
        contract payables shall be allocated as follows:

       

      (i)    Except
        for solar panels and BOS purchases, which shall be directly paid for by SPI
        in
        accordance with supply contract or purchase order terms, PV contract payables
        incurred between the Measurement Date and the Effective Date that are due
        and
        payable for work performed after the Measurement Date shall be paid by DSCI
        and
        debited against or otherwise collected from SPI at the Closing
        Date.

       

      (ii)   PV
        contract payables invoices received by DSCI for expenses incurred for solar
        panels and BOS purchases after the Measurement Date shall be forwarded to
        SPI
        within two (2) business days of receipt for direct payment by SPI in accordance
        with supply contract or purchase order terms.

       

      (e)    Work-Related
        DSCI Expenses and Reimbursements.
        Except
        as otherwise stated herein, SPI shall pay DSCI for all “Actual Costs” incurred
        by DSCI for PV installation activities during the term of this Agreement.
        “Actual Costs” shall mean costs actually and reasonably incurred by DSCI in its
        performance of PV installation contract work, including any work required
        by
        change orders approved by DSCI and SPI.

       


      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

        (i)    Notwithstanding
          any contrary installation contract terms, DSCI shall perform and be compensated
          by SPI for the direct labor cost component of all contract terms to which
          it is
          or will become signatory during the Interim Operating Period at a rate
          of Actual
          Costs plus ten percent (10%). All other costs (insurance, etc.) shall be
          reimbursed at cost and indirect labor and general overhead will not be
          reimbursed. 

         

        (ii)   Actual
          mileage costs associated with DSCI vehicles used on PV installation projects
          during the term of this Agreement will be reimbursed at the current Internal
          Revenue Service allowable rate plus $0.20 per mile. Mileage reimbursement
          requests must be properly documented on mileage reimbursement forms that
          satisfy
          Internal Revenue Service audit requirements. 

         

        (iii)       
          All
          extraordinary travel-related expenses expected to exceed pre-approved project
          budget, must be pre-approved by SPI. Lodging, meal and incidental expenses
          for
          travel will be reimbursed at actual costs in accordance with existing DSCI
          protocols. All other necessary travel expenses will be reimbursed at actual
          costs after prior written approval by SPI. 

         

        (iv)     
           All
          DSCI
          expense reimbursement requests for contract work performed during the term
          of
          this Agreement shall be submitted to SPI by the Wednesday following each
          week in
          which such expenses have been incurred for payment processing. Such costs
          reimbursement requests shall be submitted to Perry Kostas pkostas@drcigroup.com)
          on
          behalf of SPI. Any DRCI or SPI questions or disputed cost reimbursement
          requests
          shall be addressed in writing to James M. Underwood (junderwood@dscigroup.com)
          within three (3) business days of SPI receipt of DSCI reimbursement requests.
          

         

        (v)   SPI
          payments to DSCI for PV installation work performed shall be made by the
          earlier
          of thirty (30) days from the date of DSCI’s billing or job cost accounting, as
          delivered to SPI no less than monthly, or within ten (10) days of project
          owner
          payment for such DSCI work.

         

        (f)    Insurance.
          SPI
          shall secure necessary insurance for DRCI upon DRCI obtaining a California
          Contractor’s license. If not already in place, DSCI shall immediately add DRCI
          as a “named insured” party for all PV contracts as provided herein.

         

        (g)   Accounting
          and Reconciliation.
           

         

        (i)    SPI
          shall
          properly account for DRCI financial transactions during the term of this
          Agreement, and shall provide to DSCI A/R Aging, A/P Aging, and Job Cost
          Summary
          reports for DRCI, and such others as DSCI may request, on or before the
          15th
          of each
          month for the preceding month. A joint review of the reports will be conducted
          within five (5) days of delivery to DSCI and the parties shall endeavor
          to
          resolve any reconciliation discrepancies or disputes by the 25th
          of each
          reporting month. 

         

        (ii)   In
          the
          event this Agreement is terminated, prior to reconciliation of the monthly
          accounting period for any reason other than the expiration of the Interim
          Operating Period, one hundred ten percent (110%) of the projected net amount
          to
          be owed to DSCI for the corresponding period will be held by SPI in escrow
          until
          a final accounting addressing such period has been approved by the affected
          parties. If a final accounting cannot be agreed upon within 30 days after
          the
          Closing Date, the parties agree to resolve any related disputes through
          binding
          arbitration under the commercial rules of the American Arbitration Association
          in Sacramento County, California under a single arbitrator. 

        


        (iii)  
            All
          contract work in progress or completed during the term of this Agreement
          will be
          jointly reviewed by the parties hereto, with a preceding month job-cost
          report
          prepared and discussed by the 15th
          of each
          month. Such report shall be prepared by DRCI with the assistance of DSCI,
          and
          distributed to DSCI by the 10th
          of every
          month. 

        



        
          
             

          

          
            4

            
              

            

          

          
             

          

        


        (h)   Ongoing
          Communication.
          During
          the term of this Agreement, the parties agree to communicate regularly
          and in
          good faith. 

        


        
          	 	
                  (i)

                	
                  DRCI
                    Points of Contact:

                


        

        


        
          	 	
                  §

                	
                  Operations:
                    Todd Lindstrom: tlindstrom@dscigroup.com


                


        

        
          	 	
                  §

                	
                  Financial:
                    Jim Underwood: junderwood@dscigroup.com


                


        

        
          	 	
                  §

                	
                  Construction:
                    Todd Lindstrom: tlindstrom@dscigroup.com


                


        

        
          	 	
                  §

                	
                  Purchasing:
                    Perry Kostas: pkostas@dscigroup.com

                


        

        


        
          	 	
                  (ii)

                	
                  SPI
                    Point of Contact:

                


        

        


        
          	 	
                  §

                	
                  Operations:
                    Glenn Carnahan: gcarnahan@solarpowerinc.net


                


        

        
          	 	
                  §

                	
                  Financial:
                    Glenn Carnahan: gcarnahan@solarpowerinc.net


                


        

        


        
          	 	
                  (iii)

                	
                  DSCI
                    Points of Contact:

                


        

        


        
          	 	
                  §

                	
                  Operations:
                    Jim Underwood
                    junderwood@dscigroup.com

                


        

        
          	 	
                  §

                	
                  Financial:
                    Jim Underwood junderwood@dscigroup.com,


                


        

        
          	 	
                  §

                	
                  Construction:
                    Ron Stickney
                    rstickney@dscigroup.com

                


        

        
          	 	
                  §

                	
                  Purchasing
                    and Onsite Construction: Matt Arrowsmith
                    marrowsmith@dscigroup.com

                


        

        


        (iv) 
            James
          Underwood and Ronald Stickney or their respective designees will be present
          at a
          weekly conference call scheduled for Mondays at 11:00 a.m., or at such
          other
          mutually agreed upon time. Todd Lindstrom or his designee will distribute
          a
          proposed meeting agenda on the previous business day. 

        


        (v)   The
          parties agree to respond in a constructive manner to requests for information
          or
          approvals within 48 hours of receipt of such a request. Unless as indicated,
          all
          correspondence shall be in writing and transmitted via electronic mail
          or
          facsimile to the attention of the herein identified contact representatives
          for
          each party, as appropriate. 

        


        (i)   Security
          Interest in Operating Advances.
          Any
          working capital advances made by SPI, for the benefit of DRCI or DSCI,
          in the
          Ordinary Course of Business to be conducted by DRCI or DSCI, shall be secured
          against all of the assets, receivables, contracts, rights and other assets
          of
          DRCI, including future rights and proceeds of such rights, and DRCI and
          DSCI
          grant SPI power of attorney to prepare and file all evidences of such Security
          Interest as deemed advisable by SPI to secure all such working capital
          advances.

        


        
          	 	
                  3.

                	
                  Representations
                    and Warranties.

                


        

        


        
          	 	
                  (a)

                	
                  Corporate
                    Existence and Power.
                    

                


        

         

        (i)    DSCI
          is a
          corporation duly incorporated, validly existing and in good standing under
          the
          laws of the State of California and has all corporate power and authority
          required to carry on the Business as now conducted. DSCI is duly qualified
          to do
          business as a foreign corporation in each jurisdiction where the character
          of
          the property owned or leased by it or the nature of its activities make
          such
          qualification necessary to carry on the Business as now conducted, except
          for
          those jurisdictions where failure to be so qualified has not had, and may
          not
          reasonably be expected to have, a Material Adverse Effect. DSCI has previously
          provided to SPI true and complete copies of the charter and bylaws of DSCI
          as
          currently in effect.

         


        
          
             

          

          
            5

            
              

            

          

          
             

          

        


        (ii)   DRCI
          is a
          corporation duly incorporated, validly existing and in good standing under
          the
          laws of the State of California and has all corporate power and authority
          required to carry on the Business as now conducted. DRCI is duly qualified
          to do
          business as a foreign corporation in each jurisdiction where the character
          of
          the property owned or leased by it or the nature of its activities make
          such
          qualification necessary to carry on the Business as now conducted, except
          for
          those jurisdictions where failure to be so qualified has not had, and may
          not
          reasonably be expected to have, a Material Adverse Effect. DRCI has previously
          provided to SPI true and complete copies of the character and bylaws of
          DRCI as
          currently in effect.

         

        (iii)       
          SPI
          is a
          corporation duly incorporated, validly existing and in good standing under
          the
          laws of the State of California and has all corporate power and authority
          required to carry on its business. SPI is duly qualified to do business
          as a
          foreign corporation in each jurisdiction where the character of the property
          owned or leased by it or the nature of its activities make such qualification
          necessary to carry on its business, except for those jurisdictions where
          failure
          to be so qualified has not had, and may not reasonably be expected to have,
          a
          Material Adverse Effect. SPI has previously provided to DSCI and DRCI true
          and
          complete copies of the charter and bylaws of SPI as currently in
          effect.

         

        
          	 	
                  (b)

                	
                  Corporate
                    Authorization.
                    

                


        

         

        (i)    The
          execution, delivery and performance by DSCI of each of this Agreement to
          which
          it is a party and the consummation by DSCI of the transactions contemplated
          hereunder are within its powers and have been duly authorized by all necessary
          action. This Agreement to which DSCI is a party constitutes a legal, valid
          and
          binding agreement of DSCI, enforceable against it in accordance with its
          terms.
          DSCI has provided SPI with at true and correct copy of the resolutions
          of the
          board of directors of DSCI approving this Agreement and the transactions
          contemplated hereunder. 

         

        (ii)   The
          execution, delivery and performance by DRCI of each of this Agreement to
          which
          it is a party and the consummation by DRCI of the transactions contemplated
          hereunder are within its powers and have been duly authorized by all necessary
          action. This Agreement to which DRCI is a party constitutes a legal, valid
          and
          binding agreement of DRCI, enforceable against it in accordance with its
          terms.
          DRCI has provided SPI with a true and correct copy of the resolutions of
          the
          board of directors of DRCI approving this Agreement and the transactions
          contemplated hereunder.

         

        (iii)       
          The
          execution, delivery and performance by SPI of each of this Agreement to
          which it
          is a party and the consummation by SPI of the transactions contemplated
          hereunder are within its powers and have been duly authorized by all necessary
          action. This Agreement to which DRCI is a party constitutes a legal, valid
          and
          binding agreement of DRCI, enforceable against it in accordance with its
          terms.
          SPI has provided DSCI and DRCI with a true and correct copy of the resolutions
          of the board of directors of SPI approving this Agreement and the transactions
          contemplated hereunder.

         

        
          	 	
                  (c)

                	
                  Non-Contravention.
                    

                


        

         

        (i)    The
          execution, delivery and performance of this Agreement by DSCI does not
          and will
          not, with or without the passage of time, (A) contravene or conflict with
          the
          charter or bylaws of DSCI, (B) contravene or conflict with, or constitute
          a
          violation of, any provisions of any Laws binding upon DSCI, or (C) conflict
          with
          or constitute a breach or default under, or give rise to any right of
          termination, cancellation or acceleration of, or to a loss of any benefit
          under,
          any judgment, court order, consent decree or any agreement, indenture,
          contract,
          note, bond, or other instrument binding upon DSCI, or by which any of the
          PV
          Contracts is or may be bound, or any license, franchise, permit or similar
          authorization held by DSCI, or (ii) result in the creation or imposition
          of any
          encumbrances on any PV Contract. Except as provided herein, there are no
          DSCI
          loan agreements, credit agreements, guarantees, notes, mortgages, deeds
          of
          trust, subordination agreements, pledges, powers of attorney, consents
          or
          arrangements by which the PV Contracts are bound or in any way
          affected.

         


        
          
             

          

          
            6

            
              

            

          

          
             

          

        


        (ii)   The
          execution, delivery and performance of this Agreement by DRCI does not
          and will
          not, with or without the passage of time, (A) contravene or conflict with
          the
          charter or bylaws of DRCI, (B) contravene or conflict with, or constitute
          a
          violation of, any provisions of any Laws binding upon DRCI, or (C) conflict
          with
          or constitute a breach or default under, or give rise to any right of
          termination, cancellation or acceleration of, or to a loss of any benefit
          under,
          any judgment, court order, consent decree or any agreement, indenture,
          contract,
          note, bond, or other instrument binding upon DRCI, or by which any of the
          PV
          Contracts is or may be bound, or any license, franchise, permit or similar
          authorization held by DRCI, or (ii) result in the creation or imposition
          of any
          encumbrances on any PV Contract. There are no DRCI loan agreements, credit
          agreements, guarantees, notes, mortgages, deeds of trust, subordination
          agreements, pledges, powers of attorney, consents or arrangements by which
          the
          PV Contracts are bound or in any way affected.

         

        (iii)       
          The
          execution, delivery and performance of this Agreement by SPI does not and
          will
          not, with or without the passage of time, (A) contravene or conflict with
          the
          charter or bylaws of SPI, (B) contravene or conflict with, or constitute
          a
          violation of, any provisions of any Laws binding upon SPI, or (C) conflict
          with
          or constitute a breach or default under, or give rise to any right of
          termination, cancellation or acceleration of, or to a loss of any benefit
          under,
          any judgment, court order, consent decree or any agreement, indenture,
          contract,
          note, bond, or other instrument binding upon SPI.

         

        (d)   Consents.
          Except
          as set forth on Exhibit
          A,
          no
          consent or approval of any court, governmental entity or other public authority,
          or of any other person is required as a condition to the validity or
          enforceability of this Agreement or any other instruments to be executed
          by DSCI
          to effectuate this Agreement, or the completion or validity of any of the
          transactions contemplated hereunder, including the contribution, transfer
          and
          assignment by DSCI of the PV Contracts to DRCI. 

        


        (e)   Contracts.
          Exhibit
          B
          sets
          forth a true, correct and complete list of all PV Contracts (“PV Contracts”).
Except
          as
          provided herein, each PV Contract is a legal, valid and binding obligation
          of
          DSCI enforceable against DSCI in accordance with its terms (except as
          enforceability may be limited by applicable bankruptcy, insolvency,
          reorganization, moratorium or other similar laws now or hereafter in effect
          relating to or affecting creditors’ rights generally, including the effect of
          statutory and other laws regarding fraudulent conveyances and preferential
          transfers, and subject to the limitations imposed by general equitable
          principles regardless of whether such enforceability is considered in a
          proceeding at law or in equity), and DSCI is not in default and has not
          failed
          to perform any obligation thereunder, and there does not exist any event,
          condition or omission which would constitute a breach or default (whether
          by
          lapse of time or notice or both) by any other person. Except as disclosed
          in
Exhibit
          B,
          DSCI
          has not received any notice of the intention of any party to terminate
          any PV
          Contract.

        


        (f)   Licenses
          and Permits.
          DSCI
          has all licenses, franchises, permits and other similar authorizations
          affecting, or relating in any way to, the Business required by Law to be
          obtained by DSCI to permit DSCI to conduct its Business in substantially
          the
          same manner as its Business has heretofore been conducted.

        


        (g)   Compliance
          with Laws.
          The
          operation of the Business and condition of the PV Contracts have not violated
          or
          infringed, and, do not violate or infringe, in any respect any Law or any
          order,
          writ, injunction or decree of any governmental entity. DSCI has not received
          any
          written or oral communications from any governmental entity that alleges
          that
          its Business is not in compliance in any respect with any Law. 

        



        
          
             

          

          
            7

            
              

            

          

          
             

          

        


        (h)   Product
          Warranties.
          The PV
          Contracts contain all of the product and service warranties and guarantees
          extended by DSCI currently in effect with respect to its Business. Except
          as set
          forth in Exhibit
          A,
          there
          have not been any amendments to or deviations from such warranties and
          guarantees contained in the PV Contracts. There are no written claims,
          or claims
          threatened in writing, exist against DSCI with respect to product warranties
          and
          guarantees on products or services provided in its Business or related
          to the PV
          Contracts.

        

          (i)    Customer
            and Supplier Relations.
            DSCI
            maintains good relations with each of its PV Contract customers and no
            event has
            occurred that would adversely affect DSCI ’s relations with any such customer.
            No PV Contract customer (or former customer) during the last 12 months
            has
            canceled, terminated or made any threat to cancel or otherwise terminate
            its
            contract, or to decrease its usage of DSCI’s services or products. DSCI has not
            received any notice to the effect that any current customer or supplier
            may
            terminate or alter its business relations with DSCI, either as a result
            of the
            transactions contemplated by this Agreement or otherwise.

          


          (j)    SPI
            Representation.
            SPI
            represents that it has the financial resources, expertise and PV industry
            sales
            and marketing experience required to perform as set forth in this
            Agreement.

          


          (k)   DSCI
            Disclosure.
            No
            representation, warranty or covenant made by DSCI in this Agreement contains
            an
            untrue statement of a fact or omits to state a fact required to be stated
            herein
            or therein or necessary to make the statements contained herein or therein
            not
            misleading.

          


          (l)    DRCI
            Disclosure.
            No
            representation, warranty or covenant made by DRCI in this Agreement contains
            an
            untrue statement of a fact or omits to state a fact required to be stated
            herein
            or therein or necessary to make the statements contained herein or therein
            not
            misleading.

          


          (m)       
            SPI
            Disclosure.
            No
            representation, warranty or covenant made by SPI in this Agreement contains
            an
            untrue statement of a fact or omits to state a fact required to be stated
            herein
            or therein or necessary to make the statements contained herein or therein
            not
            misleading.

          


          
            	 	
                    4.

                  	
                    Covenants; Conditions
                      to Obligation to Provide Operating Working Capital.

                  


          

          


          
            	 	
                    (a)

                  	
                    Assignment
                      of Contracts.
                      

                  


          

           

          (i)    During
            the term of this Agreement, except as otherwise provided herein, DSCI
            shall
            transfer and assign all its right, title and interest in its existing
            and
            subsequent PV Contracts to DRCI immediately upon DRCI obtaining a valid
            California Contractor license and required insurance. In the event any
            PV
            contract contains non-assignment or non-transfer provisions, DSCI shall
            notify
            SPI immediately and use Best Efforts to negotiate a transfer and assignment
            to
            DRCI upon DRCI obtaining a valid California Contractor license. 

           

          (ii)   Except
            as
            provided in Section 4(a)(iii), all new PV work secured by DRCI or SPI
            within the
            Future Franchise Area during the Interim Operating Period shall be put
            into
            contract under DRCI’s name if DRCI has been properly licensed and otherwise
            becomes qualified to serve as the general contractor or first tier
            subcontractor. In the event certain new PV work is contracted under DSCI’s
            license and name, DSCI shall ensure that such contract terms allow for
            transfer
            and assignment by DSCI to its affiliates without consent of the other
            contracting party, and shall contain standard DSCI contract terms. If
            upon the
            Closing Date, SPI desires to have any PV Contracts or PV contracts executed
            during the Interim Operating Period by DSCI transferred and assigned
            to SPI, and
            if SPI is then licensed and otherwise qualified to serve as the contractor
            or
            first tier subcontractor, any such contracts not explicitly excluded
            herein
            shall then be so transferred and assigned.

           


          
            
               

            

            
              8

              
                

              

            

            
               

            

          


          (iii)       
            Upon
            DRCI
            obtaining a valid California Contractor license, all new PV work during
            the term
            of this Agreement shall be contracted under DRCI’s license and name; provided,
            however, DSCI shall have three (3) business days to review and approve
            all new
            contract proposals, which consent shall not be unreasonably withheld.
            

           

          (iv)      
            DSCI
            shall not take any or omit to take any action, or cause others to take
            any or
            omit to take any action that results in the termination of any current
            unassigned DSCI or DRCI PV contract or future assigned DRCI PV contract.
            

          


          (v)   During
            the Interim Operating Period, for PV installation work secured by DRCI
            or SPI
            within the Future Franchise Area, DSCI shall be offered the exclusive
            opportunity to subcontract for such work. For PV installation work presently
            in
            contract by DSCI within the Future Franchise Area, DSCI may elect to
            become
            DRCI’s or SPI’s installation sub-contractor upon transfer and assignment of such
            contracts by terms of this Agreement. In both such cases, unless the
            parties
            agree otherwise, DSCI shall be paid actual costs plus reimbursable expenses
            as
            provided in Section
            2(e)
            hereof,
            and enter into a mutually agreed upon sub-contract agreement.

          


          (b)   Warranty
            by DSCI.
            All
            DSCI warranty obligations as of the Effective Date will continue to be
            performed
            by DSCI. DSCI warrants that all work performed shall be in a workmanlike
            manner
            consistent with the Contractors State License Board and California Energy
            Commission warranty procedures in effect at the time of completion for
            each
            project. DSCI will satisfactorily respond to and act to satisfactorily
            address
            all warranty issues claimed within five (5) business days after receiving
            written notification as follows:

          


          (i)    Acknowledge
            in writing to claimant of receipt of warranty claim.

          


          (ii)   Contact
            the claimant and endeavor to resolve the problem within five (5) business
            days,
            or schedule a visit to diagnose the problem within five (5) business
            days of
            receipt of notice unless mutually agreed in writing by DSCI and the claimant.
            

          


          (iii)        In
            the
            event DSCI is unable to resolve the problem within five (5) business
            days or
            while on site, DSCI will endeavor to resolve the remaining warranty claims
            at
            the earliest practicable time. 

          


          (iv)  
              In
            the
            event DSCI fails to address a warranty claims of which it had been notified
            as
            provided above, and following written notice of intent to so proceed,
            SPI or
            DRCI may take reasonable steps to attempt to resolve the claim at DSCI’s
            expense, exclusive of any costs covered from any obligated manufacturer.
            

          


          (c)   Conditions
            to Obligation of SPI.
            The
            obligation of SPI to advance operating funds to consummate existing and
            new
            business, and to provide general and administrative support for the Continuing
            Business is subject to satisfaction of the following conditions:

          


          (i)    All
            covenants set forth in Section 3(a)-(c) shall have been performed in
            all
            material respects;

          


          (ii)   No
            action, suit, or proceeding shall be pending or threatened against DRCI
            or DSCI
            before any court or quasi-judicial or administrative agency of any federal,
            state, local, or foreign jurisdiction or before any arbitrator.

          



          
            
               

            

            
              9

              
                

              

            

            
               

            

          


          (d)   No
            Assumption of Liabilities.
            Except
            as otherwise expressly stated in this Agreement, neither DRCI nor SPI
            assumes
            any obligation or liability for any liabilities associated with DSCI’s Business
            and all such DSCI liabilities and obligations shall remain the responsibility
            of
            DSCI. Except as otherwise expressly stated in this Agreement, DSCI assumes
            no
            obligation or liability for any liabilities associated with DRCI’s and SPI’s
            Business, and all such liabilities and obligations shall remain the
            responsibilities of those entities, respectively.

          


          (e)   Subcontracting.
            DSCI
            will retain existing PV installation contracts for DRCI but will subcontract
            with DRCI for installation services on all existing and future PV projects
            except for those related to: Segue Construction, Salinas; Advent Construction,
            Lancaster; Lassen View, LLC, Red Bluff; River City Construction, Redding;
            and
            Point West Properties, Redding. 

          


          
            	 	
                    5.

                  	
                    Remedies
                      for Breaches of This Agreement.
                      

                  


          

           

          (a)   Survival
            of Representations and Warranties.
            Unless
            expressly stated otherwise herein, all of the representations, warranties
            and
            covenants of the Parties contained in this Agreement shall survive the
            termination hereunder (even if the damaged Party knew or had reason to
            know of
            any misrepresentation or breach of warranty or covenant at the time of
            Closing)
            and shall continue in full force and effect for a period of three (3)
            years from
            the date of termination. 

           

          (b)   Indemnification
            by DSCI and DRCI.
            In
            the
            event DSCI or DRCI breaches any of their respective representations,
            covenants
            or warranties, then DSCI and DRCI agree to jointly indemnify SPI from
            and
            against the entirety of any Adverse Consequences SPI may suffer resulting
            from
            the breach (or the alleged breach). In addition, DRCI and DSCI agree
            to jointly
            indemnify SPI from and against the entirety of any Adverse Consequences
            SPI may
            suffer resulting from, arising out of, relating to, in the nature of,
            or caused
            by the operations of DRCI
            prior to the Closing, including those resulting from DSCI or DRCI actions
            for
            contracts performed or entered into during the term of this Agreement,
            but only
            to the extent of DSCI’s or DRCI’s negligent actions. 

           

          (c)   Indemnification
            by SPI. In
            the
            event SPI breaches any of its representations, covenants or warranties,
            then SPI
            agrees to indemnify DSCI and DRCI from and against the entirety of any
            Adverse
            Consequences DSCI or DRCI may suffer resulting from the breach (or the
            alleged
            breach). In addition, SPI agrees to indemnify DSCI and DRCI from and
            against the
            entirety of any Adverse Consequences DSCI or DRCI may suffer from SPI
            actions
            resulting from, arising out of, relating to, in the nature of, or caused
            by
            SPI’s operations of DRCI after the Effective Date, but only to the extent
            of
            SPI’s negligent actions.

          


          
            	 	
                    6.

                  	
                    Termination.
                      

                  


          

          


          (a)   Termination
            of Agreement.
            This
            Agreement will terminate on the earlier of the Plan of Merger transaction
            Closing Date or as provided below:

          


          (i)    the
            Parties may terminate this Agreement by mutual written consent at any
            time;

          


          (ii)   SPI
            may
            terminate this Agreement by giving written notice to DSCI and DRCI (A)
            in the
            event DSCI has breached any material representation, warranty, or covenant
            contained in this Agreement in any material respect, SPI has notified
            DSCI of
            the breach, and the breach has continued without cure for a period of
            three (3)
            business days after the notice of breach, or (B) if the closing of the
            contemplated Merger shall not have occurred, for any reason.

          



          
            
               

            

            
              10

              
                

              

            

            
               

            

          


          (iii)      
             DSCI
            may
            terminate this Agreement by giving written notice to DRCI and SPI (A)
            in the
            event DRCI and SPI has breached any material representation, warranty,
            or
            covenant contained in this Agreement in any material respect, DSCI has
            notified
            DRCI and SPI of the breach, and the breach has continued without cure
            for a
            period of three (3) business days after the notice of breach, or (B)
            if the
            closing of the contemplated Merger shall not have occurred, for any
            reason.

          


          (iv)      
             DRCI
            may
            terminate this Agreement by giving written notice to DSCI and SPI (A)
            in the
            event DSCI and SPI has breached any material representation, warranty,
            or
            covenant contained in this Agreement in any material respect, DRCI has
            notified
            DSCI and SPI of the breach, and the breach has continued without cure
            for a
            period of three (3) business days after the notice of breach, or (B)
            if the
            closing of the contemplated Merger shall not have occurred, for any
            reason.

          


          (b)   Effect
            of Termination.
            Upon
            termination of this Agreement any monies owed or owing to any party by
            any other
            party or parties shall be promptly paid. The provisions of Sections 1,
            3, 4, 5,
            6, 7 and 8 shall survive the termination of this Agreement.

          


          
            	 	
                    7.

                  	
                    Restrictive
                      Covenants.
                      

                  


          

          


          (a)   Confidentiality
            and Trade Secret Protection.
            At all
            times during the Restricted Period, DSCI and SPI will keep in confidence
            and
            trust all Confidential Information, and will not use or disclose any
            Confidential Information without the written consent of DRCI. Further,
            at all
            times, during the Restricted Period, DSCI and SPI will keep in confidence
            and
            trust and maintain the secrecy of all of DRCI’s Trade Secrets, for so long as
            such information remains a Trade Secret as defined herein, and DSCI and
            SPI will
            not use or disclose any such Trade Secrets without the written consent
            of
            DRCI.

          


          (b)   Non-Solicitation
            of Customers.
            Except
            as may be permitted in the Agreement and Plan of Merger, at all times
            during the
            Restricted Period, DSCI hereby expressly covenants and agrees that it
            will not,
            on its own behalf or on behalf of any other person, company, partnership,
            corporation or other entity, solicit, divert, take away or accept Business
            from
            any Customer of DRCI for the purpose of engaging in any business that
            is
            competitive with DRCI’s Business. For purposes of this covenant, the term
“Customer” means (i) any person or entity that was a customer of DRCI or DSCI
            during the last twenty-four (24) months prior to the Effective Time;
            and (ii)
            any customer of SPI during the Restricted Period.

          


          (c)   Non-Solicitation
            of Employees.
            (i) At
            all times during the Restricted Period, DSCI will not directly or indirectly,
            on
            its own behalf or on behalf of any other person, company, partnership,
            corporation or other entity, solicit or induce, or attempt to solicit
            or induce,
            any employee of DRCI or SPI, to terminate his or her relationship with
            DRCI or
            SPI and/or to enter into an employment or agency relationship with DSCI
            or with
            any other person or entity with whom DRCI is affiliated; (ii) At all
            times
            during the Restricted Period, if the Merger does not close for any reason
            except
            for breach by DSCI, its officers or shareholders, SPI will not directly
            or
            indirectly, on its own behalf or on behalf of any other person, company,
            partnership, corporation or other entity, solicit or induce, or attempt
            to
            solicit or induce, any employee of DSCI, to terminate his or her relationship
            with DSCI and/or to enter into an employment or agency relationship with
            SPI or
            with any other person or entity with whom SPI is affiliated.

          


          (d)   Acknowledgments.
            DSCI
            acknowledges and agrees that the restrictions set forth in this Section
            7, where
            applicable, are intended to protect SPI and DRCI’s interest in its Confidential
            Information and Trade Secrets and its commercial relationships and goodwill
            (with its customers, prospective customers, vendors, consultants and
            employees),
            including, without limitation, Confidential Information, Trade Secrets,
            commercial relationships and goodwill acquired by SPI and DRCI through
            any
            acquisitions or mergers or otherwise developed, and are reasonable and
            appropriate for these purposes.

          



          
            
               

            

            
              11

              
                

              

            

            
               

            

          


          (e)   Disclosure
            of Agreement.
            During
            the Restricted Period, DSCI agrees to immediately inform SPI of any employment
            or affiliation by DSCI with any company other than SPI that provides
            services
            related to the Business. 

          


          
            	 	
                    (f)

                  	
                    Injunction
                      and Attorney’s Fees for Restrictive Covenants.
                      

                  


          

          


          (i)    DSCI
            acknowledges and agrees that the non-competition, non-disclosure,
            non-solicitation and non-recruitment covenants contained in this Section
            7 of
            this Agreement, where applicable, are a reasonable means of protecting
            SPI from
            unfair competition by DSCI. DSCI further agrees that any breach of any
            of these
            covenants will result in irreparable damage and injury to the SPI and
            that SPI
            will be entitled to injunctive relief in any court of competent jurisdiction
            without the necessity of posting any bond. DSCI also agrees that it shall
            be
            responsible for all damages incurred by SPI due to any breach of the
            restrictive
            covenants contained in this Agreement if so ordered by the Court and
            that the
            prevailing party may seek an award of attorneys’ fees and costs arising out of
            any litigation or arbitration under this paragraph.

          


          (ii)   SPI
            acknowledges and agrees that the non-competition, non-disclosure,
            non-solicitation and non-recruitment covenants contained in this Section
            7 of
            this Agreement, where applicable, are a reasonable means of protecting
            DSCI and
            DRCI from unfair competition by SPI. SPI further agrees that any breach
            of any
            of these covenants will result in irreparable damage and injury to DSCI
            or DRCI
            and that those will be entitled to injunctive relief in any court of
            competent
            jurisdiction without the necessity of posting any bond. SPI also agrees
            that it
            shall be responsible for all damages incurred by DSCI or DRCI due to
            any breach
            of the restrictive covenants contained in this Agreement if so ordered
            by the
            Court and that the prevailing party may seek an award of attorneys’ fees and
            costs arising out of any litigation or arbitration under this
            paragraph.

           

          (g)   Severability.
            The
            parties agree that if any provisions of this Section 7 shall be adjudicated
            to
            be invalid or unenforceable, such provision shall be deleted from the
            Agreement,
            but such deletion is to apply only with respect to the operation of such
            provision in the particular jurisdiction in which such adjudication is
            made, and
            the validity or enforceability of any other provision hereof shall not
            be
            affected thereby. The parties further agree that to the extent any provision
            hereof is deemed unenforceable by virtue of its scope in terms of area
            or length
            of time or for any other reason, but may be made enforceable by limitations
            thereon, such provision shall be enforceable to the fullest extent permissible
            under the laws and public policies applied in the jurisdiction in which
            enforcement is sought.

          


          
            	 	
                    (h)

                  	
                    Non-Disparagement.
                      

                  


          

           

          (i)    DSCI
            shall not at any time prior to or after the Effective Time whether in
            writing or
            orally, criticize, disparage, or otherwise demean in any way the DRCI,
            SPI or
            their affiliates or their respective products, services, reputation,
            officers,
            directors, employees or shareholders.

           

          (ii)   DRCI
            shall not at any time prior to or after the Effective Time whether in
            writing or
            orally, criticize, disparage, or otherwise demean in any way DSCI, SPI
            or their
            affiliates or their respective products, services, reputation, officers,
            directors, employees, or shareholders.

           

          (iii)       
            SPI
            shall
            not at any time prior to or after the Effective Time whether in writing
            or
            orally, criticize, disparage, or otherwise demean in any way DRCI, DSCI
            or their
            affiliates or their respective products, services, reputation, officers,
            directors, employees, or stockholders.

           

          
            	 	
                    8.

                  	
                    Miscellaneous.
                      

                  


          

          



          
            
               

            

            
              12

              
                

              

            

            
               

            

          


          (a)   No
            Third-Party Beneficiaries.
            Except
            as otherwise provided in this Agreement, this Agreement shall not confer
            any
            rights or remedies upon any person other than the Parties and their respective
            successors and permitted assigns.

          


          (b)   Entire
            Agreement.
            This
            Agreement (including the documents referred to herein) constitutes the
            entire
            agreement among the Parties and supersedes any prior understandings,
            agreements,
            or representations by or among the Parties, written or oral, to the extent
            they
            related in any way to the subject matter hereof.

          


          (c)   Succession
            and Assignment.
            Except
            as otherwise provided in this Agreement, this Agreement shall be binding
            upon
            and inure to the benefit of the Parties named herein and their respective
            successors and permitted assigns. No Party may assign either this Agreement
            or
            any of its rights, interests, or obligations hereunder without the prior
            written
            approval of the other Parties.

          


          (d)   Counterparts.
            This
            Agreement may be executed in one or more counterparts (including by means
            of
            facsimile), each of which will be deemed an original but all of which
            together
            will constitute one and the same instrument. The signature page of any
            counterpart may be detached therefrom without impairing the legal effect
            of the
            signature(s) thereon provided such signature page is attached to any
            other
            counterpart identical thereto having additional signature pages executed
            by the
            other Parties.

          


          (e)   Headings.
            The
            section headings contained in this Agreement are inserted for convenience
            only
            and shall not affect in any way the meaning or interpretation of this
            Agreement.

          


          (f)    Notices.
            All
            notices, requests, demands, claims, and other communications hereunder
            will be
            in writing. Any notice, request, demand, claim, or other communication
            hereunder
            shall be deemed duly given if (and then two business days after) it is
            sent by
            registered or certified mail, return receipt requested, postage prepaid,
            and
            addressed to the intended recipient as set forth below:

          


          
            	
                    If
                      to DSCI or DRCI:

                  	
                    James
                      M. Underwood

                  


          

          2727
            Churn Creek Road

          Redding,
            CA 96002

          Telephone: (530)
            222-3157

          Facsimile: (530)
            222-2543

          E-Mail:
            junderwood@dscigroup.com

          


          
            	 	
                    Copy
                      to:

                  	
                    Ronald
                      H. Stickney

                  


          

          2727
            Churn Creek Road

          Redding,
            CA 96002

          Telephone: (530)
            222-3157

          Facsimile: (530)
            222-2543

          E-Mail:
            rstickney@dscigroup.com

          


          


          
            	
                    If
                      to SPI:

                  	
                    Solar
                      Power, Inc.

                  


          

          4080
            Cavitt Stallman Road, Suite 100

          Granite
            Bay, California 95746

          Attn:
             Stephen
            Kircher

          Facsimile:
            (916) 789-7411

          



          
            
               

            

            
              13

              
                

              

            

            
               

            

          


          
            	 	
                    Copy
                      to:

                  	
                    Bullivant
                      Houser Bailey

                  


          

          1415
            L
            Street, Suite 1000

          Sacramento,
            CA 95814

          Attn:
            Mark C Lee

          


          Any
            Party
            may send any notice, request, demand, claim, or other communication hereunder
            to
            the intended recipient at the address set forth above using any other
            means
            (including personal delivery, expedited courier, messenger service, telecopy,
            telex, ordinary mail, or electronic mail), but no such notice, request,
            demand,
            claim, or other communication shall be deemed to have been duly given
            unless and
            until it actually is received by the intended recipient. Any Party may
            change
            the address to which notices, requests, demands, claims, and other
            communications hereunder are to be delivered by giving the other Parties
            notice
            in the manner herein set forth.

          


          (g)   Governing
            Law.
            This
            Agreement shall be governed by and construed in accordance with the domestic
            laws of the State of California without giving effect to any choice or
            conflict
            of law provision or rule that would cause the application of the laws
            of any
            jurisdiction other than the State of California.

          


          (h)   Amendments
            and Waivers.
            No
            amendment of any provision of this Agreement shall be valid unless the
            same
            shall be in writing and signed by all of the Parties. No waiver by any
            Party of
            any default, misrepresentation, or breach of warranty or covenant hereunder,
            whether intentional or not, shall be deemed to extend to any prior or
            subsequent
            default, misrepresentation, or breach of warranty or covenant hereunder
            or
            affect in any way any rights arising by virtue of any prior or subsequent
            such
            occurrence.

          


          (i)    Severability.
            Any
            term or provision of this Agreement that is invalid or unenforceable
            in any
            situation in any jurisdiction shall not affect the validity or enforceability
            of
            the remaining terms and provisions hereof or the validity or enforceability
            of
            the offending term or provision in any other situation or in any other
            jurisdiction.

          


          (j)    Construction.
            The
            Parties have participated jointly in the negotiation and drafting of
            this
            Agreement. In the event an ambiguity or question of intent or interpretation
            arises, 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 of the provisions of this Agreement.
            Any reference to any federal, state, local, or foreign statute or law
            shall be
            deemed also to refer to all rules and regulations promulgated thereunder,
            unless
            the context otherwise requires. The word “including” shall mean including
            without limitation.

          


          (k)   Further
            Assurances.
            All
            parties agree that on and after the Effective Date, they shall take all
            appropriate action and execute any documents and instruments or conveyances
            of
            any kind which may be reasonable necessary or advisable to carry out
            the
            provisions of this Agreement.

          


          


          


          (Signature
            Page Follows Immediately)

          


          


          



          
            
               

            

            
              14

              
                

              

            

            
               

            

          


          


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

          


          
            	 	
                    SOLAR
                      POWER, INC.

                  
	 	
                    a
                      California corporation

                  
	 	 
	 	
                    By:__________________________

                  
	 	 
	 	
                    Name:
                      Stephen C. Kircher

                  
	 	 
	 	
                    Title:
                      Chief Executive Officer

                  
	 	 
	 	 
	 	
                    DALE
                      STICKNEY CONSTRUCTION, INC.

                  
	 	
                    A
                      CALIFORNIA CORPORATION

                  
	 	 
	 	
                    By:__________________________

                  
	 	 
	 	
                    Name:
                      James M. Underwood

                  
	 	 
	 	
                    Title:
                      Chief Financial Officer

                  
	 	 
	 	 
	 	
                    DALE
                      RENEWABLE CONSULTING, INC.

                  
	 	
                    A
                      CALIFORNIA CORPORATION

                  
	 	 
	 	
                    By:__________________________

                  
	 	 
	 	
                    Name:
                      Ronald H. Stickney

                  
	 	 
	 	
                    Title:
                      Chief Executive Officer