**Exhibit 10.27**

 

**FORBEARANCE AND REPAYMENT AGREEMENT**

** **

This Forbearance and Repayment Agreement (hereinafterreferred to as the “Agreement”) is entered into as effective as of September 12,2008, between and among Suntech America, Inc., and its affiliates (collectively,“Suntech”), and Open Energy Corporation, and its affiliates (collectively, “OEC”and, together with  Suntech,collectively, the “Parties”)

 

RECITALS:

 

WHEREAS, Suntech has sold to OEC, and OEC haspurchased from Suntech, certain solar module products (the “Products”), and OEChas inspected and accepted delivery of such Products in accordance with thepurchase orders and related documents between the Parties;

 

WHEREAS, OEC has failed to pay the purchaseprice for the Products and such outstanding amounts currently equalapproximately $3,053,530.28 (the “Outstanding Payment Obligations”);

 

WHEREAS, subject to the terms and conditionsset forth in this Agreement, Suntech has agreed to forbear from taking anyenforcement action against OEC with respect to the Outstanding PaymentObligations, provided that OEC fully and timely makes each of the paymentsprovided for under this Agreement and otherwise complies with the other termsof this Agreement;

 

WHEREAS, it is now the intention of theParties to establish a payment plan for the Outstanding Payment Obligations andto provide for the mutual release of the Parties upon the conditions more fullyset forth below.

 

1

----

 

AGREEMENT:

 

 

NOW, THEREFORE, in consideration of theterms, covenants, conditions, and agreements set forth below, and insatisfaction and settlement of the Outstanding Payment Obligations, Suntech andOEC agree as follows:

 

1.             OECagrees to pay to Suntech the aggregate amount of  Three Million Fifty-Three Thousand FiveHundred Thirty and 28/100 Dollars ($3,053,530.28), plus interest in an amountof twelve percent (12%) per annum, or the highest amount legally allowableunder California law, if lower than 12% per annum, in accordance with the paymentschedule set forth on Exhibit A attached hereto, which paymentsinclude accrued interest to the each payment date.

 

2.             Afailure to make full and timely payment by OEC in accordance with Exhibit Ashall be deemed a default under this Agreement, and such default shall bedeemed material in the event full payment is not made within five (5) businessdays of the default (a “Payment Default”). Suntech shall have no obligation to notify OEC of any Payment Default.

 

3.             Uponthe occurrence of any Payment Default, Suntech, in its sole discretion, isentitled to file suit in either the state or federal courts of the State ofCalifornia for breach of this Agreement, and to submit to the Court a Complaintand/or a Stipulated Judgment in substantially the same form as attached heretoas Exhibit B.   The total amount to be entered for theStipulated Judgment shall equal $3,053,530.28, plus applicable interest, lessany amounts previously paid by OEC under the terms of this Agreement.   Following the occurrence of any PaymentDefault, in addition to the remedies provided herein, Suntech may pursue anyother remedy available to it under law or in equity.

 

4.             OEChereby consents to personal jurisdiction and venue of any court in the State ofCalifornia for this purpose.

 

5.             OEChereby further consents to entry of the Stipulated Judgment pursuant to theterms and conditions of this Agreement, as more fully explained.

 

2

----

 

6.             If,upon the occurrence of any Payment Default, Suntech desires to file suit and tosubmit for entry and enforcement a Stipulated Judgment pursuant to the terms ofthis Agreement, Suntech shall so notify OEC in writing in accordance with Paragraph25 below.  At the time of saidnotification, Suntech shall provide OEC with a copy of the Complaint andStipulated Judgment to be filed with the Court. OEC shall have five (5) business days to review the Complaint and/orStipulated Judgment and notify Suntech of any alleged factual misstatementscontained therein, but Suntech is not required to obtain OEC’s approval as toform of the Complaint or Stipulated Judgment or accept any comments withrespect to which it in good faith disagrees.

 

7.             Afterthe review period referenced in Paragraph 6 hereof has expired, Suntech mayfile the Complaint and Stipulated Judgment pursuant to the terms and conditionsof this Agreement.  The dollar amount tobe entered for the Stipulated Judgment shall be the result of subtracting theamounts previously paid by OEC under this Agreement from the total amount dueand owing Suntech pursuant to the terms and conditions hereof.

 

8.             Effectiveupon full payment by OEC in accordance with the terms and conditions of thisAgreement, Suntech for and on behalf of itself, its predecessors, affiliates,partners, successors, assigns, agents, employees, representatives, andattorneys, do, subject to the provisions herein, hereby fully and foreverremise, release, and discharge OEC and its predecessors, affiliates,successors, shareholders, assigns, agents, employees, representatives, andattorneys, of and from any and all claims, demands, agreements, contracts,covenants, torts, actions, suits, causes of action, obligations, controversies,debts, costs, expenses, accounts, damages, losses, and liabilities of whateverkind or nature, in law, equity, or otherwise, whether known or unknown, whichagainst them Suntech had, may have had, or now have, or which any of Suntech’spredecessors, affiliates, partners, successors, assigns, agents, employees, representatives,or attorneys, hereafter can, shall, or may have, for or by reason of anymatter, cause, or thing whatsoever, up to and including the date hereof, whichmay relate to or arise out 

 

3

----

 

of the events which are the subject of this Agreement and/or the OutstandingPayment Obligations.  This release,however, is not intended to be and shall not be construed as a release of therights, obligations, or duties of OEC under this Agreement or otherwise relatingto the Products.

 

9.             Effectiveupon and in consideration of Suntech’s execution of this Agreement, OEC, forand on behalf of itself and its predecessors, affiliates, successors,shareholders, assigns, agents, employees, representatives, and attorneys(collectively, “OEC Parties”), do hereby fully and forever remise, release, anddischarge Suntech, its predecessors, affiliates, successors, partners, assigns,agents, employees, representatives, and attorneys, of and from any and allclaims, demands, agreements, contracts, covenants, torts, actions, suits,causes of action, obligations, controversies, debts, costs, expenses, accounts,damages, losses, and liabilities of whatever kind or nature, in law, equity, orotherwise, whether known or unknown, which against them OEC had, may have had,or now have, or which any of OEC’s predecessors, affiliates, successors,shareholders, assigns, agents, employees, representatives, or attorneys,hereafter can, shall, or may have, for or by reason of any matter, cause, orthing whatsoever, up to and including the date hereof, which may relate to orarise out of the events which are the subject of this Agreement and/or theOutstanding Payment Obligations.  Thisrelease, however, is not intended to be and shall not be construed as a releaseof the rights, obligations, or duties of Suntech under this Agreement.  However, this release is not intended to be,and shall not be construed to be a release of any rights of any OEC Party underany Suntech warranty or in respect of any product liability claim relating tothe Products.

 

10.           TheParties agree that each of them will keep confidential and not disclose theterms of this Agreement and/or the amount of the settlement to any person,corporation or other entity.  However,the following disclosures shall not constitute a breach of the obligationsunder this Paragraph:  (i) disclosurewhich may be necessary to enforce the terms and conditions of this Agreement; (ii) disclosurepursuant to a subpoena or specific court or agency order;

 

4

----

 

(iii) disclosure necessary to comply with the Internal RevenueCode, state tax law or any other applicable law and any disclosure necessaryfor OEC to comply with its reporting obligations under the Securities ExchangeAct of 1934, as amended; and (iv) any disclosure made after writtenconsent thereto is obtained from the other Parties (or from the other Parties’attorney).  In the event a Party intendsor is compelled to make a disclosure for any of the foregoing reasons, thedisclosing Party shall give reasonable notice and opportunity to object to thenon-disclosing parties.

 

11.           TheParties understand and agree that this Agreement is a compromise settlement ofdisputed claims, and that neither the execution of this Agreement, nor the agreementby any Party to the terms set forth herein, or the payment of any sums ofmoney, described herein, shall constitute or be construed as an admission ofwrongdoing or liability on the Party. Nor is one Party’s acceptance of a compromised amount of settlementmoney from the other Party an admission of any lack of wrongdoing or liabilityby that other Party.  Neither thisAgreement, nor any provision hereof, nor any statement of any Party, made innegotiation towards this Agreement shall be admissible in any proceeding forany purpose of showing wrongdoing or liability on the part of such Party.

 

12.           TheParties hereto acknowledge that they have been advised by legal counsel and arefamiliar with the provisions of California Civil Code § 1542, which isexpressly understood by each Party to provide as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THECREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OFEXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HISSETTLEMENT WITH THE DEBTOR.

 

The Parties are aware of said code sectionand hereby expressly waive any and all rights they may have thereunder,as well as under any other statute or common law principles of similar effect,except as to the promises, covenants, and warranties contained herein which areexpressly 

 

5

----

 

identified as surviving the execution of thisAgreement.  This Agreement shall act asrelease of all future claims that may arise from the above-mentioned events,disputes, and litigation, whether such claims are currently known, unknown,foreseen, or unforeseen.  The Partiesunderstand and acknowledge the significance and consequences of the specific waiverof California Civil Code § 1542 above and hereby assume fullresponsibility for any injuries, damages, losses, or liabilities they mayhereafter incur from the above-mentioned events, disputes, and litigation.

 

13.           EachParty agrees to execute all documents referred to herein to carry out theprovisions of this Agreement, and any other documents which at any other timemay be reasonably necessary to carry out the terms of this Agreement.

 

14.           EachParty represents and warrants that he or she or it has full power to enter intothis Agreement, and that the individual executing this Agreement on his, her,or its behalf is fully empowered to bind him, her, or it and fully authorizedto enter into this Agreement.  Each Partyrepresents and warrants that he, she, or it has not assigned, encumbered, or inany manner transferred all or any portions of the claims, causes of action, orother matters released by her, him or it herein except as expressly set forthherein.  Each Party acknowledges andagrees that the warranties and representations made by each Party in thisParagraph, and throughout this Agreement, are each an essential and materialterm of this Agreement, without which the consideration given herein would nothave been given by any of them.

 

15.           EachParty acknowledges and represents that, in effecting and executing thisAgreement, he, she, or it has received from legal counsel full legal advice asto his, her, or its legal rights, or had the opportunity to do so, and that he,she, or it has read all of this Agreement and fully understands its content andlegal effect.

 

6

----

 

16.           EachParty acknowledges and agrees that no representation, statement, or promise notexpressly set forth herein has been made by or on behalf of any of the otherParties hereto or by any of their agents, servants, employees, representatives,or attorneys, and that no representations, statements, or promises that are notexpressly set forth herein have been made or relied on by any Party.  This Agreement constitutes a singleintegrated contract.

 

17.           Allof the covenants, releases, and agreements herein contained in favor of thepersons or entities released are made for the express benefit of each and allof said persons or entities, each of whom has the right to enforce suchprovisions.

 

18.           Ifany action or motion in law or equity, including an action for declaratoryrelief, is brought to enforce or interpret provisions of this Agreement, theprevailing Party shall be entitled to recover reasonable attorneys’ fees andcosts, which may be determined by the Court in said action or in any separateaction brought for that purpose, in addition to any other relief to which theParty may be entitled.

 

19.           ThisAgreement shall be binding upon and shall inure to the benefit of the Partieshereto and their respective partners, successors, representatives, assigns,employees, agents, attorneys, and parent, subsidiary, and affiliatedcorporations.

 

20.           ThisAgreement is made and entered into in the State of California and shall beinterpreted, applied, and enforced under and pursuant to the laws of the Stateof California, and shall be enforceable in any state or federal court of theState of California.

 

21.           Ininterpreting the language of this Agreement, each Party to this Agreement shallbe treated as having drafted this Agreement after meaningful negotiations.  This Agreement may be modified only in awriting signed by each Party.

 

22.           Ifany material portion, provision, or part of this Agreement, other than themutual releases, is held, determined, or adjudicated to be invalid,unenforceable, or void for any reason whatsoever, each such portion, provision,or part shall be severed from the remaining portions, provisions, or parts ofthis Agreement and shall not affect the validity or enforceability of suchremaining portions, provisions, or parts.

 

7

----

 

23.           TheParties agree that this Agreement may be signed in counterparts, with Suntechretaining the original signatures.

 

24.           TheParties agree that the performance of this Agreement may be pleaded and/or usedas a full and complete defense to, and may be used as a basis for, aninjunction against any action, suit or other proceeding which may be instituted,prosecuted, or attempted concerning a breach of this Agreement.

 

25.           Byconsenting to a Stipulated Judgment in a form substantially the same as ExhibitB pursuant to the terms and conditions of this Agreement, OEC understands andagrees that it is hereby waiving any and all procedural and substantivedefenses to payment of the Outstanding Payment Obligations, including, but notlimited to, statutes of limitations, laches, product quality, quantity orfitness for a particular use, breach of warranty, any offsets or other sums ofmonies allegedly owing OEC in connection with the sale of the Products, venue,forum non conveniens, personal and/or subject matter jurisdiction, whether atlaw or in equity, and regardless of applicable law. The Parties agree andunderstand that OEC’s waiver of these and any and all procedural andsubstantive potential defenses to the Outstanding Payment Obligations isknowing and voluntary after consultation with counsel, and was a materialinducement to Suntech’s consent to this Agreement.

 

26.           Allnotices, requests and other communications to any Party hereunder shall be sentby certified mail (return receipt not required), as follows:

 

A.    Ifto Suntech:

 
|   | To:                     | Legal Department |
|--------|-------------------------|------------------|
|   | Suntech America         |
|   | 188 The Embarcadero     |
|   | 8th Flr.                |
|   | San Francisco, CA 94105 |

 

With a copy to:

 

8

----

 

B.    If to OEC:

 

To:                              GeneralCounsel514 Via de la Valle, Suite 200Solana Beach, CA 92075Facsimile: 858.794.8811email: dsprinkle@openenergycorp.com

 

With a copy to: James Mercer III

 

Sheppard, Mullin, Richter & Hampton LLP

12275 El Camino Real, Suite 200

San Diego, CA 92130

Facsimile: 858.509.3691

Email:jmercer@sheppardmullin.com

 

*[Remainderof page intentionally left blank.]*

 

9

----

 

IN WITNESS WHEREOF, the Parties hereto haveexecuted this Agreement on September 12, 2008.

 
| **Suntech America, Inc.**          |       | **Open Energy Corporation**              |
|-----------------------------------------|------------|------------------------------------------|
| ** **                              | ** ** | ** **                               |
| ** **                              | ** ** | ** **                               |
| By:                                     | ** ** | ** **                               | By: | ** ** |
| Name:                                   | ** ** | ** **                               | Name: | ** ** |
| Title:                                  | ** ** | ** **                               | Title: | ** ** |
| ** **                              | ** ** | ** **                               |
| ** **                              | ** ** | ** **                               |
| APPROVED AS TO FORM:                    | ** ** | APPROVED AS TO FORM:                     |
| ** **                              | ** ** |                                     |
| **BAKER & McKENZIE**           | ** ** | **SHEPPARD, MULLIN, RICHTER &** |
| ** **                              | ** ** | ** **                               |
| ** **                              | ** ** | **HAMPTON, LLP**                         |
| ** **                              | ** ** | ** **                               |
| ** **                              | ** ** | ** **                               |
| Christopher Van Gundy                   | ** ** | James Mercer III                         |
| Attorneys for Suntech America, Inc | ** ** | Attorneys for Open Energy Corporation    |
|                                         |            |                                          |  |  |  |  |  |  |

 

10

----

 

EXHIBIT A

 

PAYMENT SCHEDULE

 
| **Payment Date**   | ** ** | **Amount of Payment (includes accrued interest)** | ** ** |
|-------------------------|------------|----------------------------------------------------------------------------|------------|
|                    |       |                                                                       |       |
| September 19, 2008 |       | $1,000,000.00                                                              |       |
|                    |       |                                                                       |       |
| January 15, 2009   |       | $500,000.00                                                                |       |
|                    |       |                                                                       |       |
| February 15, 2009  |       | $297,558.18                                                                |       |
|                    |       |                                                                       |       |
| March 15, 2009     |       | $297,558.18                                                                |       |
|                    |       |                                                                       |       |
| April 15, 2009     |       | $297,558.18                                                                |       |
|                    |       |                                                                       |       |
| May 15, 2009       |       | $297,558.18                                                                |       |
|                    |       |                                                                       |       |
| June 15, 2009      |       | $297,558.18                                                                |       |
|                    |       |                                                                       |       |
| July 15, 2009      |       | $297,558.18                                                                |       |
|                    |       |                                                                       |       |
| Total:                  |       | $3,285,349                                                                 |       |

 

11

----

 

EXHIBIT B

 

Stipulated Judgment

 

12

----