Document:

exv10w3

Exhibit 10.3

Loan No. 68890396

ACKNOWLEDGEMENT, CONFIRMATION AND ESTOPPEL

(SPI)

     This Acknowledgement, Confirmation and Estoppel, dated as of June 22, 2010 (this “Estoppel”)
is made by Solar Power, Inc., a California corporation (“SPI”) in favor of Umpqua Bank, an Oregon
corporation (“Lender”), and is made pursuant to and in connection with (i) that certain Operations
and Maintenance Agreement dated December 11, 2009 by and between SPI and Solar Tax Partners 1, LLC,
a California limited liability company (“Borrower”) (the “Operations Agreement”), a copy of which
is attached hereto as Exhibit A and incorporated herein by this reference; and (ii) that
certain Photovoltaic System Energy Output Guaranty dated as of December 18, 2009, executed by SPI
in favor of Borrower and Master Tenant 2008-C LLC, a Delaware limited liability company (“Master
Tenant”) (the “Output Guaranty”), a copy of which is attached hereto as Exhibit B and
incorporated herein by this reference..

     SPI acknowledges that it has been advised that Borrower has applied to Lender for a loan (the
“Loan”) to be secured by, among other collateral, a collateral assignment of Borrower’s rights
under the Operations Agreement (the “Operations Agreement Assignment”), and Borrower’s and Master
Tenant’s rights under the Output Guaranty (the “Output Guaranty Assignment”). At the request of
Lender, and in order to induce Lender to make the Loan, SPI certifies and represents to Lender as
follows:

A. Operations Agreement

     1. The Operations Agreement is in full force and effect, and has not been amended. Neither
SPI nor, to the actual knowledge of SPI, Borrower, is in default under the Operations Agreement,
nor has any event or condition occurred that, with the giving of notice or the passage of time,
would constitute a default under the Operations Agreement or entitle SPI to cease providing
services and otherwise performing its obligations under the Operations Agreement.

     2. SPI acknowledges and consents to the Operations Agreement Assignment to secure Borrower’s
obligations to Lender under the Loan.

     3. To the actual knowledge of SPI, there is no existing lease, mortgage, security interest or
other interest in or lien which could attach to the Operations Agreement other than the Operations
Agreement Assignment.

     4. SPI agrees that it shall give written notice to Lender (the “Default Notice”) of any event
or circumstance that would entitle SPI to terminate the Operations Agreement or to suspend its
services thereunder on the basis of any default or alleged default by Borrower (a) so long as any
monetary default (i.e., a default that may be cured by the mere payment of money to SPI or a third
person) is cured within thirty (30) calendar days after the date of delivery of the Default Notice;
or (b) in the case of a Non-Curable Default, so long as Lender, within thirty (30) calendar days of
delivery of the Default Notice, cures any monetary default(s) and also commences, and thereafter
diligently prosecutes to completion, such efforts as may be necessary for it to obtain control of
the SEF (as defined in the Operations Agreement), which may include foreclosure under the deed of
trust executed by Borrower, as trustor, for the benefit of Lender, as beneficiary, to further
secure the Loan (the “Deed of Trust”), either judicially or by power of sale, or to obtain a deed
in lieu of such foreclosure. Non-Curable Defaults include, but are not limited to, any defaults
that cannot be cured by Lender, the filing of any bankruptcy proceedings by or on behalf of
Borrower (whether the proceedings are voluntary or involuntary), Borrower’s general assignment for
the benefit of creditors, or appointment of a receiver for Borrower or any of its assets. All cure
periods afforded Lender under this provision shall be suspended during the pendency of any writ,
order, or injunction of any court, or the automatic stay of proceedings imposed by bankruptcy law,
which

Acknowledgement, Confirmation 

and Estoppel

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Loan No. 68890396

effectively prevent Lender from commencing or prosecuting a foreclosure under the Deed of
Trust, or taking any other action necessary to cure any default under the Operations Agreement or
to succeed to the interests of Borrower under the Operations Agreement. Upon the completion of
foreclosure proceedings or an assignment in lieu thereof, all Non-Curable Defaults will be deemed
waived by SPI. Lender has no obligation to cure any defaults or events of default of Borrower
under the Operations Agreement, only the right to do so. SPI agrees to accept the cure of a
Borrower default by Lender.

     5. SPI agrees that, notwithstanding that Lender may succeed to the rights or obligations of
Borrower under the Operations Agreement, Lender shall not be obligated to indemnify SPI with
respect to any claims arising out of events, conditions or circumstances that came into existence
or occurred prior to the date that Lender succeeded to the rights or obligations of Borrower under
the Operations Agreement.

     6. SPI agrees that by Lender’s acceptance of this Estoppel and the Operations Agreement
Assignment, Lender has not become personally liable under the terms and obligations of the
Operations Agreement and Lender will not become so liable unless and until it assumes said
obligations and is recognized by SPI as the Owner under said Operations Agreement and shall be
liable only so long as Lender maintains ownership of the estate conferred by the Operations
Agreement.

     7. SPI acknowledges and agrees that should Lender succeed to any of the obligations of
Borrower under the Operations Agreement, Lender shall have the right to further assign those rights
and obligations to one or more persons or entities having the capacity to perform the obligations
of Borrower under the Operations Agreement.

B. Output Guaranty.

     1. The Output Guaranty is in full force and effect, and has not been amended. No event or
condition has occurred that, with the giving of notice or the passage of time, would entitle SPI to
terminate the Output Guaranty or cease performance of its obligations under the Output Guaranty.

     2. SPI acknowledges and consents to the Output Guaranty Assignment to secure Borrower’s
obligations to Lender under the Loan.

     3. To the actual knowledge of SPI, there is no existing lease, mortgage, security interest or
other interest in or lien which could attach to the Output Guaranty other than the Output Guaranty
Assignment.

     4. SPI agrees that it shall give written notice to Lender (the “Default Notice”) of any event
or circumstance that would entitle SPI to terminate the Output Guaranty or to cease performance of
its obligations thereunder on the basis of any default or alleged default by Borrower or Master
Tenant (a) so long as any monetary default (i.e., a default that may be cured by the mere payment
of money to SPI or a third person) is cured within thirty (30) calendar days after the date of
delivery of the Default Notice; or (b) in the case of a Non-Curable Default, so long as Lender,
within thirty (30) calendar days of delivery of the Default Notice, cures any monetary default(s)
and also commences, and thereafter diligently prosecutes to completion, such efforts as may be
necessary for it to obtain control of the PV System (as defined in the Output Guaranty), which may
include foreclosure under the deed of trust executed by Borrower, as trustor, for the benefit of
Lender, as beneficiary, to further secure the Loan (the “Deed of Trust”), either judicially or by
power of sale, or to obtain a deed in lieu of such foreclosure. Non-Curable Defaults include, but
are not limited to, any defaults that cannot be cured by Lender, the filing of any bankruptcy
proceedings by or on behalf of Borrower or Master Tenant (whether the proceedings are voluntary or
involuntary), Borrower’s or Master Tenant’s general assignment for the benefit of creditors, or
appointment of a receiver for Borrower or Master Tenant, or for any of their respective assets.
All cure

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periods afforded Lender under this provision shall be suspended during the pendency of any
writ, order, or injunction of any court, or the automatic stay of proceedings imposed by bankruptcy
law, which effectively prevent Lender from commencing or prosecuting a foreclosure under the Deed
of Trust, or taking any other action necessary to cure any default under the Output Guaranty or to
succeed to the interests of Borrower and/or Master Tenant under the Output Guaranty. Upon the
completion of foreclosure proceedings or an assignment in lieu thereof, all Non-Curable Defaults
will be deemed waived by SPI. Lender has no obligation to cure any defaults or events of default
of Borrower or Master Tenant under the Output Guaranty, only the right to do so. SPI agrees to
accept the cure of a Borrower default or a Master Tenant default by Lender.

     5. SPI acknowledges and agrees that should Lender succeed to any of the rights or obligations
of Borrower or Master Tenant under the Output Guaranty, Lender shall have the right to further
assign those rights to one or more persons or entities having the capacity to perform the
obligations of Borrower or Master Tenant under the Output Guaranty.

C. General Provisions

     1. As used in this Estoppel, the term “actual knowledge of SPI” shall mean the actual
knowledge of those officers or agents of SPI responsible for management of SPI’s rights and
responsibilities under the Operations Agreement and the Output Guaranty, after diligent inquiry.

     2. All notices required to be given by SPI to Lender may be delivered in person to the
below-named officer, or transmitted via facsimile with receipt confirmed by telephone, or by
Federal Express or other similar overnight delivery service, overnight charges prepaid, and
addressed as follows:

	 	 	 

	 

	 	Umpqua Bank
	 

	 	Attn: Ed Jensen
	 

	 	One Capitol Mall, Suite 600
	 

	 	Sacramento, CA 95814
	 

	 	Facsimile: (916) 556-1570
	 
	 	 
	With a copy to:

	 	Kraft Opich, LLP
	 

	 	7509 Madison Avenue, Suite 111
	 

	 	Citrus Heights, CA 95610
	 

	 	Attention: Martha Evensen Opich
	 

	 	Facsimile: (916) 880-3045

[Signatures appear on following page]

Acknowledgement, Confirmation 

and Estoppel

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Loan No. 68890396

     Whereupon, this Estoppel is executed as of the date first above written.

	 	 	 	 	 
	Solar Power, Inc.,

a California corporation

 	 
	By:  	/s/ Stephen C. Kircher	 
	 	Its: CEOexv10w4

Exhibit 10.4

Loan No. 68890396

CONTINUING GUARANTY

     This Continuing Guaranty (this “Guaranty”) dated as of June 22, 2010, is made by Stephen C.
Kircher, an individual (“Guarantor”), in favor of Umpqua Bank, an Oregon corporation (“Lender”).

RECITALS

     A. Solar Tax Partners 1, LLC, a California limited liability company (“Borrower”), has applied
to Lender for a loan of Nine Million Nine Hundred Fifty Thousand and 00/100 Dollars ($9,950,000.00)
(“Loan”), subject to the terms and conditions of that certain Loan Agreement (“Loan Agreement”)
dated as of the same date as this Guaranty.

     B. The Loan will be evidenced by that certain Promissory Note dated as of the same date as
this Guaranty executed by Borrower in favor of Lender in the principal amount of Nine Million Nine
Hundred Fifty Thousand and 00/100 Dollars ($9,950,000.00) (“Note”).

     C. The Note will be secured by, among other security, the Security Documents (as defined in
the Loan Agreement), including but not limited to the Easement Deed of Trust, Assignment of Rents
and Agreements, Security Agreement and Fixture Filing dated as of the same date as this Guaranty
(“Deed of Trust”) executed by Borrower in favor of Lender covering the real property described in
the Deed of Trust (“Property”).

     D. As a condition to making the Loan, Lender has required that Borrower execute and deliver an
Unsecured Environmental Indemnity of Borrower (the “Environmental Indemnity”).

     E. The Guarantor will derive substantial and direct benefit from Lender’s making the Loan.

     F. As a condition to making the Loan, Lender has required that Guarantor execute and deliver
this Guaranty.

     Now, therefore, in order to induce Lender to enter into the Loan Agreement and to make the
Loan, and in consideration thereof, Guarantor hereby agrees as follows:

     1. Guaranty.

     Guarantor absolutely and unconditionally guarantees the punctual payment when due, whether at
stated maturity, by acceleration, or otherwise, of all indebtedness and obligations of Borrower now
or later existing under the Note, the Deed of Trust, the other Security Documents, Loan Agreement
and the other Loan Documents (defined in the Loan Agreement) and the Environmental Indemnity,
whether for principal, interest, fees, expenses, or otherwise including, without limitation, all
real property taxes and assessments affecting the Property, all costs and expenses, including
insurance premiums, of maintaining in full force all policies of insurance required pursuant to the
Deed of Trust, all costs and expenses, including repair and maintenance costs, required in order to
maintain the Property in the condition required under the Deed of Trust and all indebtedness and
obligations incurred by Borrower under the indemnity provisions of the Environmental Indemnity.
The terms “indebtedness” and “obligations” are used in their most comprehensive sense and include
all debts, obligations, and liabilities of Borrower incurred or created, with or without notice to
Guarantor, whether voluntary or involuntary and however arising, whether due or not due, absolute
or contingent, liquidated or unliquidated, determined or undetermined, whether Borrower is liable
individually or jointly with others, and whether recovery on any indebtedness or obligations is now
or later becomes barred by any statute of limitations or is or later

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Loan No. 68890396

becomes otherwise unenforceable, or shall be an allowed or disallowed claim under the Bankruptcy Code or other
applicable law. The foregoing indebtedness, liabilities and other obligations of the Borrower, and
all other indebtedness, liabilities and obligations to be paid or performed by the Guarantor in
connection with this Guaranty shall hereinafter be collectively referred to as the “Obligations.”

          Notwithstanding the foregoing, the liability of Guarantor under this Guaranty shall initially
be limited to the principal amount of Four Hundred Fifty Thousand and 00/100 Dollars ($450,000.00),
subject to reduction as follows:

          (i) Between the Closing and the end of the Fourth Loan Year, for each Loan Year in
which a Debt Service Coverage Ratio of not less than 1.20:1.00 is achieved, the maximum
principal amount of Guarantor’s liability under this Guaranty shall be reduced by
Seventy-Five Thousand and 00/100 Dollars ($75,000.00), effective on the first day of the
following Loan Year. By way of example, if Borrower achieves a Debt Service Coverage Ratio
of not less than 1.20:1.00 during the First, Second, Third and Fourth Loan Years, the
maximum principal amount of Guarantor’s liability under this Guaranty during the Fifth Loan
Year will be One Hundred Thousand and 00/100 Dollars ($100,000.00). In no event shall the
maximum principal amount of Guarantor’s liability under this Guaranty during the Fifth Loan
Year be less than One Hundred Thousand and 00/100 Dollars ($100,000.00).

          (ii) If (1) Borrower has achieved a Debt Service Coverage Ratio of not less than
1.20:1.00 as of the end of each of the Fourth Loan Year and the Fifth Loan Year, or if
Borrower achieves a Debt Service Coverage Ratio of not less than 1.20:1.00 as of the end of
each of two subsequent and consecutive Loan Years beginning with the Sixth Loan Year, and
(2) at that time the Debt Service Reserve is fully funded in the amount of $700,000, or
more, then the Lender will release Kircher from further liability under this Guaranty.

     2. Guaranty Absolute

     (a) Guarantor guarantees that the Obligations will be paid and performed strictly in
accordance with the terms of the Loan Documents, regardless of any law, regulation, or order now or
later in effect in any jurisdiction affecting any of the terms or the rights of Lender with respect
to that. The liability of Guarantor under this Guaranty will be irrevocable, absolute and
unconditional irrespective of:

     (i) any lack of validity or enforceability of any of the Loan Documents (or any other
agreement or instrument relating to the Loan Documents) or any of the Obligations against
Borrower, Guarantor, or any other guarantor;

     (ii) any change in the time, manner, or place of payment of, or in any other term of,
any of the Obligations, or any other amendment or waiver of or any consent to departure from
any of the Loan Documents or any Obligation, including, without limitation, changes in the
terms of disbursement of the Loan proceeds or repayment, modifications, extensions
(including extensions beyond and after the original term), or renewals of payment dates,
changes in interest rate, the cancellation or surrender of any Loan Document or the
advancement of additional funds by Lender in its discretion, or the assignment of any Loan
Document;

     (iii) any exchange, release, or nonperfection of any collateral, or any release or
amendment or waiver of or consent to departure from any other guaranty, for any of the
Obligations; or

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Kircher

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Loan No. 68890396

     (iv) any other circumstance that might otherwise constitute a defense available to, or
a discharge of, Borrower in respect of the Obligations of Guarantor under this Guaranty.

     (b) Regardless of any termination of this Guaranty or the cancellation of the Note or any
other agreement evidencing the Obligations, if at any time any payment of any of the Obligations
(from any source) is rescinded, repaid, or must otherwise be returned by Lender due to the
insolvency, bankruptcy, or reorganization of Borrower or Guarantor, or for any other circumstance,
this Guaranty will continue to be effective or be reinstated, as the case may be, as though that
payment had not been made.

     3. Guaranty Independent; Waivers

     (a) Guarantor agrees that:

     (i) the obligations under this Guaranty are joint and several and are independent of
and in addition to the undertakings of Borrower pursuant to the Loan Documents, any evidence
of indebtedness issued in connection with the Loan, any deed of trust or security agreement
given to secure the Loan, any other guaranties given in connection with the Loan, and any
other obligations of Guarantor to Lender, subject to the maximum amount of Guarantor’s
liability under this Guaranty and the reduction of such principal amounts as set forth in
Section 1 above;

     (ii) a separate action may be brought to enforce the provisions of this Guaranty
whether Borrower is a party in any action or not;

     (iii) Lender may at any time, or from time to time, in its sole discretion:

     (A) extend or change the time of payment or performance or the manner, place,
or terms of payment or performance of any of the Obligations;

     (B) exchange, release, or surrender any of the collateral security, or any part
of it, by whomever deposited, which is now or may later be held by Lender in
connection with any of the Obligations;

     (C) sell or purchase any of the collateral at public or private sale, or at any
broker’s board, in the manner permitted by law, and after all costs and expenses of
every kind for collection, sale, or delivery, the net proceeds of any sale may be
applied by Lender on any of the Obligations; and

     (D) settle or compromise with Borrower, or any other person liable, any of the
Obligations, or subordinate the payment of it, or any part of it, to the payment of
any other debts or claims, that may at any time be due or owing to Lender or any
other person or entity;

     (iv) Lender will be under no obligation to marshal any assets in favor of Borrower or
Guarantor or in payment of any of the Obligations; and

     (v) the Guarantor’s liability hereunder shall be the immediate, direct, and primary
obligation of the Guarantor and shall not be contingent upon the Lender’s exercise or
enforcement of any remedy it may have against the Borrower or any other person, or against
any collateral for the Loan or other security for any Obligations.

Continuing Guaranty

Kircher

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Loan No. 68890396

     (b) Guarantor waives:

     (i) presentment, demand, protest, notice of acceptance, notice of dishonor, notice of
nonperformance, and any other notice with respect to any of the Obligations and this
Guaranty, and promptness in commencing suit against any party, or in giving any notice to or
making any claim or demand on Guarantor;

     (ii) any right to require Lender to proceed against Borrower or any other guarantor,
proceed against or exhaust any security held from Borrower or any other guarantor, or pursue
any remedy in Lender’s power;

     (iii) any defense based on any legal disability or other defense of Borrower, any other
guarantor, or other person or by reason of the cessation or limitation of the liability of
Borrower from any cause other than full payment of all sums payable under the Note and the
performance of the other Obligations;

     (iv) any defense based on any lack of authority of the officers, directors, partners,
or agents purporting to act on behalf of Borrower or any principal of Borrower or any defect
in the formation of Borrower or any principal of Borrower;

     (v) to the fullest extent permitted by law, all rights and benefits under Civil Code §
2809 purporting to reduce a guarantor’s obligations in proportion to the principal
obligation;

     (vi) any defense based on the application by Borrower of the proceeds of the Loan for
purposes other than the purposes represented by Borrower to Lender or intended or understood
by Lender or Guarantor, or based on Lender’s acts or omissions in administration of the
Loan;

     (vii) any defense it may acquire by reason of Lender’s election of any remedy against
it or Borrower or both, including, without limitation, election by Lender to exercise its
rights under the power of sale in the Deed of Trust and the consequent loss by Guarantor of
the right to recover any deficiency from Borrower;

     (viii) any defense based on Lender’s failure to disclose to Guarantor any information
concerning Borrower’s financial condition or any other circumstances bearing on Borrower’s
ability to pay all sums payable under the Note or any of the other Obligations or on
Lender’s failure to disclose any information with respect to the Obligations, the collateral
for the Loan or other Security for any or all Obligations, the existence or nonexistence of
any other guarantees of all or any part of the Obligations, any action or inaction on the
part of the Lender or any other Loan Party, or any other matter, fact, or occurrence
whatsoever;

     (ix) any defense based on any statute or rule of law that provides that the obligation
of a surety must be neither larger in amount nor in any other respects more burdensome than
that of a principal;

     (x) any defense based on Lender’s election, in any proceeding instituted under the
Federal Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy
Code or any successor statute;

     (xi) any defense based on any borrowing or any grant of a security interest under § 364
of the Federal Bankruptcy Code;

Continuing Guaranty

Kircher

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Loan No. 68890396

     (xii) any right of subrogation, contribution, or reimbursement against Borrower, any
right to enforce any remedy that Lender has or may in the future have against Borrower, any
other right that Lender may now or later acquire against Borrower that arises from the
existence or performance of Guarantor’s obligations under this Guaranty or would arise with
respect to the Obligations, and any benefit of, and any right to participate in, any
security for the Obligations now or in the future held by Lender;

     (xiii) the benefit of any statute of limitations affecting the liability of Guarantor
or the enforcement of the Guaranty, including, without limitation, any rights arising under
Code of Civil Procedure § 359.5;

     (xiv) any rights to setoffs or counterclaims on Borrower’s or Guarantor’s part; and

     (xv) to the fullest extent permitted by law, all rights and benefits under Code of
Civil Procedure § 580a, purporting to limit the amount of any deficiency judgment that might
be recoverable following the occurrence of a trustee’s sale under a deed of trust; Code of
Civil Procedure § 580b, stating that no deficiency may be recovered on a real property
purchase money obligation; and Code of Civil Procedure § 580d, stating that no deficiency
may be recovered on a note secured by a deed of trust on real property in case the real
property is sold under the power of sale contained in the deed of trust, if those statutory
sections have any application.

     (c) Guarantor waives all rights and defenses that Guarantor may have because Borrower’s debt
is secured by real property. This means, among other things:

     (i) The Lender may collect from Guarantor without first foreclosing on any real or
personal property collateral pledged by Borrower.

     (ii) If Lender forecloses on any real property collateral pledged by Borrower:

     (A) The amount of the debt may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price.

     (B) Lender may collect from the Guarantor even if Lender, by foreclosing on the
real property collateral, has destroyed any right the Guarantor may have to collect
from Borrower.

     This is an unconditional and irrevocable waiver of any rights and defenses Guarantor may have
because Borrower’s debt is secured by real property. These rights and defenses include, but are
not limited to, any rights or defenses based upon Sections 580a, 580b, 580d, or 726 of the
California Code of Civil Procedure.

     Guarantor waives all rights and defenses arising out of an election of remedies by the Lender,
even though that election of remedies, such as a nonjudicial foreclosure with respect to security
for a guaranteed obligation, has destroyed the Guarantor’s rights of subrogation and reimbursement
against Borrower by the operation of Section 580d of the California Code of Civil Procedure or
otherwise.

     (d) Guarantor agrees that the payment of all sums payable under the Note or any of the other
Obligations or any other act that tolls any statute of limitations applicable to the Note or the
other

Continuing Guaranty

Kircher

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Loan No. 68890396

Obligations will similarly operate to toll the statute of limitations applicable to
Guarantor’s liability. Without limiting the generality of the foregoing or any other provision of
this Guaranty, Guarantor expressly waives all benefits that might otherwise be available to
Guarantor under Civil Code §§ 2809, 2810, 2819, 2839, 2845, 2849, 2850, 2899, and 3433 and Code of
Civil Procedure §§ 580a, 580b, 580d, and 726, or similar sections.

     4. Does Not Supersede Other Guaranties. The obligations of Guarantor will be in addition to
any obligations of Guarantor under any other guaranties of the Obligations or any obligations of
Borrower or any other persons or entities previously given or later to be given to Lender, and this
Guaranty will not affect or invalidate any other guaranties. The liability of Guarantor to Lender
will at all times be deemed to be the aggregate liability of Guarantor under the terms of this
Guaranty and of any other guaranties previously or later given by Guarantor to Lender.

     5. Representations and Warranties. Guarantor represents and warrants as follows:

     (a) Guarantor has the requisite power and authority to execute and deliver this Guaranty, and
thus, even if the guaranty is not enforceable as a contract, it may be enforceable on a theory of
equitable estoppel.

     (b) Guarantor is an individual residing in the State of California with the legal capacity to
enter into the transactions contemplated by this Guaranty and is using his exact name as set forth
on page 1 of this Guaranty. Guarantor has not conducted business, filed tax returns, or registered
to conduct business under any name other than the aforesaid exact name.

     (c) Validity of Guaranty.

     (i) The execution, delivery, and performance by Guarantor of this Guaranty are within
the power of Guarantor, have received all necessary governmental approval, and will not
violate any provision of law, any order of any court or agency of government, or any
indenture, agreement, or any other instrument to which Guarantor is a party or by which
Guarantor or its property is bound, or be in conflict with, result in a breach of, or
constitute (with due notice and lapse of time) a default under any indenture, agreement, or
other instrument, or result in the creation or imposition of any lien, charge, or
encumbrance of any nature on any of its property or assets, except as contemplated by the
provisions of the Loan Documents.

     (ii) This Guaranty, when delivered to Lender, will constitute a legal, valid, and
binding obligation enforceable against Guarantor in accordance with its terms.

     (c) Financial Statements.

     (i) All financial statements and data that have been given to Lender by Guarantor with
respect to Guarantor:

     (A) are complete and correct in all material respects as of the date given;

     (B) accurately present the financial condition of Guarantor on each date as of
which and the results of Guarantor’s operations for the periods for which they have
been furnished; and

Continuing Guaranty

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Loan No. 68890396

     (C) have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods covered.

     (ii) All balance sheets and the notes that Guarantor furnished to Lender disclose all
material liabilities of Guarantor, fixed and contingent, as of their respective dates.

     (iii) There has been no adverse change in the financial condition or operations of
Guarantor since:

     (A) the date of the most recent financial statement given to Lender with
respect to Guarantor; or

     (B) the date of the financial statement given to Lender immediately prior to
the date of this Guaranty, other than changes in the ordinary course of business,
none of which have been materially adverse individually or in the aggregate.

     (d) Other Arrangements. Guarantor is not a party to any agreement or instrument materially and
adversely affecting Guarantor’s present or proposed business, properties, or assets, or operations
or conditions (whether financial or otherwise); and Guarantor is not in default in the performance,
observance, or fulfillment of any of the material obligations, covenants, or conditions in any
agreement or instrument to which Guarantor is a party.

     (e) Other Information. All other reports, papers, and written data and information given to
Lender by Guarantor with respect to Guarantor are accurate and correct in all material respects and
complete insofar as completeness may be necessary to give Lender a true and accurate knowledge of
the subject matter.

     (f) There is not now pending against or affecting Guarantor, nor to the knowledge of Guarantor
is there threatened, any action, suit, or proceeding at law or in equity or by or before any
administrative agency that, if adversely determined, would materially impair or affect the
financial condition or operations of Guarantor.

     (g) Taxes. Guarantor has filed all federal, state, provincial, county, municipal, and other
income tax returns required to have been filed by Guarantor and has paid all taxes that have become
due pursuant to the returns or pursuant to any assessments received by Guarantor, and Guarantor
does not know of any basis for any material additional assessment against it in respect of those
taxes.

     (h) Solvency. Immediately prior to and after giving effect to the incurrence of the
Guarantor’s obligation under this Guaranty the Guarantor will not be insolvent.

     (i) Maximum Amount of Guaranty. Notwithstanding any contrary provision of any Guaranty, the
obligation of each Guarantor under any Guaranty shall be limited to an aggregate amount equal to
the maximum amount that would not render such Guarantor’s obligations subject to avoidance as a
fraudulent transfer or fraudulent conveyance or any similar term under any applicable state or
federal law.

     6. Affirmative Covenants. Guarantor covenants and agrees that, so long as any part of the
Indebtedness (defined in the Deed of Trust) remains unpaid, Guarantor will do the following, unless
Lender otherwise consents in writing:

Continuing Guaranty

Kircher

7

 

Loan No. 68890396

     (a) Taxes Affecting Guarantor. File all federal, state, provincial, county, municipal, and
other income tax returns required to be filed by it and pay, before they become delinquent, all
taxes that become due pursuant to those returns or pursuant to any assessments received by it.

     (b) Compliance with Law. Promptly and faithfully comply with all laws, ordinances, rules,
regulations, and requirements, both present and future, of every governmental authority or agency
having jurisdiction that may be applicable to it.

     (c) Books and Records. Maintain complete books of accounts and other records reflecting the
results of its operations, in a form reasonably satisfactory to Lender, and furnish to Lender any
information about the financial condition of Guarantor that Lender reasonably requests, including,
but not limited to, the following information, which will be furnished without request:

(i) annually, not later ninety (90) days after the end of each calendar year,

     (A) a balance sheet of Guarantor as at the close of the fiscal year of
Guarantor, and

     (B) statements of income and expense and change in financial condition of
Guarantor for the fiscal year (each will set forth in comparable form the
corresponding figures of the previous period, will be in reasonable detail, and will
be certified by the Guarantor), and

     (C) within 30 days of filing with the Internal Revenue Service or other taxing
authority, copies of all tax returns, and

(ii) any other information or data that Lender may reasonably request.

     7. Amendments or Waiver. No amendment or waiver of any provision of this Guaranty or consent
to any departure from any provision by Guarantor will be effective unless it is in writing and
signed by Lender, and then the waiver or consent will be effective only in the specific instance
and for the specific purpose for which it is given. No notice to or demand on Guarantor will in any
case entitle it to any other or further notice or demand in similar or other circumstances.

     8. Notices. Any notice to be given or other document to be delivered by any party to the
other or others hereunder, may be delivered in person to an officer of any party, or transmitted
via facsimile with receipt confirmed by telephone, or by Federal Express or other similar overnight
delivery service, overnight charges prepaid, and addressed to the party for whom intended, as
follows:

Continuing Guaranty

Kircher

8

 

Loan No. 68890396

	     To Lender:	 	 	Umpqua Bank
	 	 	 	Attn: Ed Jensen
	 	 	 	One Capitol Mall, Suite 600
	 	 	 	Sacramento, CA 95814
	 	 	 	Facsimile: (916) 556-1570

	 	 	 	with a copy to:

	 	 	 	Kraft Opich, LLP
	 	 	 	7509 Madison Avenue, Suite 111
	 	 	 	Citrus Heights, CA 95610
	 	 	 	Attention: Martha Evensen Opich
	 	 	 	Facsimile: (916) 880-3045

	     To Guarantor:	 	 	Stephen C. Kircher
	 	 	 	c/o Solar Power, Inc.
	 	 	 	1115 Orlando Ave.
	 	 	 	Roseville, CA 95661

	 	 	 	with a copy to:

	 	 	 	Weintraub Genshlea Chediak
	 	 	 	400 Capitol Mall, Suite 1100
	 	 	 	Sacramento, CA 95816
	 	 	 	Attention: David C. Adams
	 	 	 	Facsimile: (916) 446-1611

These addresses may be changed from time to time by written notice to the other parties given in
the same manner. Any matter served on or sent to Guarantor or Lender in this manner will be deemed
sufficiently given for all purposes on the date three (3) days following the date it was deposited
in a United States Post Office, except that notices of changes of address will not be effective
until actual receipt.

     9. No Waiver; Remedies. No failure on the part of Lender to exercise and no delay in
exercising any right or remedy will operate as a waiver; nor will Lender be estopped to exercise
any right or remedy at any future time because of any failure or delay; nor will any single or
partial exercise of any right or remedy preclude any other or further exercise or the exercise of
any other right or remedy. The remedies provided are cumulative and not exclusive of any remedies
provided by law.

     10. Right of Setoff. Lender is authorized at any time and from time to time, without notice
to Guarantor (any notice being expressly waived by Guarantor), to set off and apply all deposits
(general or special, time or demand, provisional or final) at any time held and other indebtedness
at any time owing by Lender to or for the credit or the account of Guarantor against any of the
obligations of Guarantor now or later existing under this Guaranty irrespective of whether demand
was made of Borrower or Guarantor and although such obligations may be contingent or unmatured.
Lender agrees promptly to notify Guarantor after any setoff and application, provided that the
failure to give notice will not affect the validity of the setoff and application. The rights of
Lender under this section are in addition to other rights and remedies (including, without
limitation, other rights of setoff) that Lender may have.

     11. Continuing Guaranty; Transfer of Note. This Guaranty is a continuing guaranty and will:

Continuing Guaranty

Kircher

9

 

Loan No. 68890396

     (a) subject to the provisions of section 2(b), remain in full force and effect until the
earlier of (a) release from liability pursuant to Section 1 or (b) payment in full of the
indebtedness and the Obligations and all other amounts payable under this Guaranty;

     (b) be binding on Guarantor; and

     (c) inure to the benefit of and be enforceable by Lender and its successors, transferees, and
assigns.

     Without limiting the generality of the subsection 11(c), Lender may assign or otherwise
transfer the Loan Documents to any other Person (defined in the Deed of Trust), and that other
Person will become vested with all the rights granted to Lender.

     12. Independent Investigation. Guarantor hereby acknowledges that Guarantor has undertaken
Guarantor’s own independent investigation of the financial condition of Borrower and all other
matters pertaining to this Guaranty and further acknowledges that Guarantor is not relying in any
manner upon any representation or statement of the Lender with respect thereto. The Guarantor
represents and warrants that Guarantor has received and reviewed copies of the Loan Documents and
that Guarantor is in a position to obtain, and Guarantor hereby assumes full responsibility for
obtaining, any additional information concerning the financial condition of Borrower and any other
matters pertinent hereto that Guarantor may desire. Guarantor is not relying upon or expecting
Lender to furnish to Guarantor any information now or hereafter in Lender’s possession concerning
the financial condition of the Borrower or any other matter.

     13. Subordination. Any indebtedness of Borrower now or later held by Guarantor is
subordinated to the indebtedness of Borrower to Lender, and any indebtedness of Borrower to
Guarantor will, if Lender requests, be collected, enforced, and received by Guarantor as trustee
for Lender and be paid over to Lender, but without reducing or limiting in any manner the liability
of Guarantor under the other provisions of this Guaranty.

     14. No Duty. Guarantor assumes the responsibility for keeping informed of the financial
condition of Borrower and of all other circumstances bearing on the risk of nonpayment of the
Obligations, and agrees that Lender will have no duty to advise Guarantor of any information known
to Lender regarding any financial condition or circumstances.

     15. Jury Trial Waiver. Guarantor waives any right to trial by jury with respect to any action
or proceeding relating to the Loan, the Loan Documents, this Guaranty or any understandings or
prior dealings between the parties.

GUARANTOR AGREES THAT THIS GUARANTY CONSTITUTES A WRITTEN CONSENT TO WAIVER OF TRIAL BY JURY
PURSUANT TO THE PROVISIONS OF CODE OF CIVIL PROCEDURE § 631 AND GUARANTOR DOES CONSTITUTE AND
APPOINT LENDER ITS TRUE AND LAWFUL ATTORNEY-IN-FACT (THE APPOINTMENT BEING COUPLED WITH AN
INTEREST) AND GUARANTOR DOES AUTHORIZE AND EMPOWER LENDER, IN THE NAME, PLACE, AND STEAD OF
GUARANTOR, TO FILE THIS GUARANTY WITH THE CLERK OR JUDGE OF ANY COURT OF COMPETENT JURISDICTION AS
A STATUTORY WRITTEN CONSENT TO WAIVER OF TRIAL BY JURY.

Initials:                      [Insert initials of parties].

Continuing Guaranty

Kircher

10

 

Loan No. 68890396

     16. Judicial Reference Provision.

     (a) In the event the Jury Trial Waiver set forth above is not enforceable, the parties elect
to proceed under this Judicial Reference Provision.

     (b) With the exception of the items specified in clause (c), below, any controversy, dispute
or claim (each, a “Claim”) between the parties arising out of or relating to the Loan or this
Guaranty or any other document, instrument or Guaranty between the undersigned parties
(collectively in this Section, the “Bank Documents”), will be resolved by a reference proceeding in
California in accordance with the provisions of Sections 638 et seq. of the California Code of
Civil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy
for the resolution of any Claim, including whether the Claim is subject to the reference
proceeding. Except as otherwise provided in the Bank Documents, venue for the reference proceeding
will be in the state or federal court in the county or district where the real property involved in
the action, if any, is located or in the state or federal court in the county or district where
venue is otherwise appropriate under applicable law (the “Court").

     (c) The matters that shall not be subject to a reference are the following: (i) nonjudicial
foreclosure of any security interests in real or personal property, (ii) exercise of self-help
remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv)
temporary, provisional or ancillary remedies (including, without limitation, writs of attachment,
writs of possession, temporary restraining orders or preliminary injunctions). This reference
provision does not limit the right of any party to exercise or oppose any of the rights and
remedies described in clauses (i) and (ii) or to seek or oppose from a court of competent
jurisdiction any of the items described in clauses (iii) and (iv). The exercise of, or opposition
to, any of those items does not waive the right of any party to a reference pursuant to this
reference provision as provided herein.

     (d) The referee shall be a retired judge or justice selected by mutual written Guaranty of the
parties. If the parties do not agree within ten (10) days of a written request to do so by any
party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the
Court (or his or her representative). A request for appointment of a referee may be heard on an ex
parte or expedited basis, and the parties agree that irreparable harm would result if ex parte
relief is not granted. Pursuant to CCP § 170.6, each party shall have one peremptory challenge to
the referee selected by the Presiding Judge of the Court (or his or her representative).

     (e) The parties agree that time is of the essence in conducting the reference proceedings.
Accordingly, the referee shall be requested, subject to change in the time periods specified herein
for good cause shown, to (i) set the matter for a status and trial-setting conference within
fifteen (15) days after the date of selection of the referee, (ii) if practicable, try all issues
of law or fact within one hundred twenty (120) days after the date of the conference and (iii)
report a statement of decision within twenty (20) days after the matter has been submitted for
decision.

     (f) The referee will have power to expand or limit the amount and duration of discovery. The
referee may set or extend discovery deadlines or cutoffs for good cause, including a party’s
failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based
upon good cause shown, no party shall be entitled to “priority” in conducting discovery,
depositions may be taken by either party upon seven (7) days written notice, and all other
discovery shall be responded to within fifteen (15) days after service. All disputes relating to
discovery which cannot be resolved by the parties shall be submitted to the referee whose decision
shall be final and binding.

Continuing Guaranty

Kircher

11

 

Loan No. 68890396

     (g) Except as expressly set forth herein, the referee shall determine the manner in which the
reference proceeding is conducted including the time and place of hearings, the order of
presentation of evidence, and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the referee, except for trial,
shall be conducted without a court reporter, except that when any party so requests, a court
reporter will be used at any hearing conducted before the referee, and the referee will be provided
a courtesy copy of the transcript. The party making such a request shall have the obligation to
arrange for and pay the court reporter. Subject to the referee’s power to award costs to the
prevailing party, the parties will equally share the cost of the referee and the court reporter at
trial.

     (h) The referee shall be required to determine all issues in accordance with existing case law
and the statutory laws of the State of California. The rules of evidence applicable to proceedings
at law in the State of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, enter equitable orders that will be
binding on the parties and rule on any motion which would be authorized in a court proceeding,
including without limitation motions for summary judgment or summary adjudication. The referee
shall issue a decision at the close of the reference proceeding, which disposes of all claims of
the parties that are the subject of the reference. Pursuant to CCP § 644, such decision shall be
entered by the Court as a judgment or an order in the same manner as if the action had been tried
by the Court and any such decision will be final, binding and conclusive. The parties reserve the
right to appeal from the final judgment or order or from any appealable decision or order entered
by the referee. The parties reserve the right to findings of fact, conclusions of laws, a written
statement of decision, and the right to move for a new trial or a different judgment, which new
trial, if granted, is also to be a reference proceeding under this provision.

     (i) If the enabling legislation, which provides for appointment of a referee is repealed (and
no successor statute is enacted), any dispute between the parties that would otherwise be
determined by reference procedure will be resolved and determined by arbitration. The arbitration
will be conducted by a retired judge or justice, in accordance with the California Arbitration Act
§1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to
discovery set forth above shall apply to any such arbitration proceeding.

     (j) THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER
THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY
KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE
PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR
IN ANY WAY RELATED TO, THE LOAN OR THIS GUARANTY, OR THE OTHER BANK DOCUMENTS.

Initials:                      [Insert initials of guarantor].

     17. Bankruptcy of Borrower. Regardless of any modification, discharge, or extension of the
Obligations or any amendment, modification, stay, or cure of Lender’s rights that may occur in any
bankruptcy or reorganization case or proceeding concerning Borrower, whether permanent or temporary
and whether assented to by Lender, Guarantor agrees that it will be obligated to pay and perform
the Obligations and discharge its other obligations in accordance with the terms of the Obligations
and the terms of this Guaranty in effect on the date of this Guaranty. Guarantor understands and
acknowledges that by virtue of this Guaranty, it has specifically assumed all risks of a bankruptcy
or reorganization case

Continuing Guaranty

Kircher

12

 

Loan No. 68890396

or proceeding with respect to Borrower. As an example, and not in any way of limitation, a
subsequent modification of the Obligations in any reorganization case concerning Borrower will not
affect the obligation of Guarantor to perform the Obligations in accordance with their original
terms.

     18. Entire Agreement. This Guaranty is intended as a final expression of this agreement of
guaranty and is intended also as a complete and exclusive statement of the terms of this agreement.
No course of prior dealings between Guarantor and Lender, no usage of the trade, and no parol or
extrinsic evidence of any nature will be used or will be relevant to supplement, explain,
contradict, or modify the terms or provisions of this Guaranty.

     19. Governing Law. This Guaranty will be governed by and construed in accordance with the
laws of California.

     20. Attorneys’ Fees. In the event of any action, proceeding or arbitration arising out of or
in connection with this Guaranty, whether or not pursued to judgment, the prevailing party shall be
entitled, in addition to all other relief, to recover its costs and reasonable attorneys’ fees,
including those incurred in any case, action, proceeding or claim under the Federal Bankruptcy Code
or any successor statute. Costs and expenses include attorneys’ fees, legal expenses, expert
witness and consulting fees whether or not there is a lawsuit, including attorneys’ fees, costs
and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction), appeals, or post-judgment collection services or proceedings.

     21. Miscellaneous

     (a) Time is of the essence.

     (b) The obligations and promises will be joint and several undertakings of each of the Persons
executing this Guaranty, and Lender may proceed against any one or more of those Persons without
waiving its right to proceed against any of the others.

     (c) Any married person who signs this instrument expressly agrees that recourse may be had
against his or her separate property for all of her or his obligations under this Guaranty.

     (d) If any term, provision, covenant, or condition or any application is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, all provisions, covenants, and
conditions and all applications not held invalid, void, or unenforceable will continue in full
force and will in no way be affected.

     (e) This Guaranty may be executed in any number of counterparts and by different parties in
separate counterparts, each of which when executed and delivered will be deemed to be an original,
and all counterparts taken together will constitute one and the same instrument.

     (f) Section headings in this Guaranty are included for convenience of reference only and do
not constitute a part of this Guaranty for any other purpose.

     (g) Notwithstanding anything to the contrary contained herein or in any other Loan Document,
this Guaranty is not secured by any collateral for the Loan, and is and shall remain unsecured.

[Signature Follows on Next Page]

Continuing Guaranty

Kircher

13

 

Loan No. 68890396

     In witness whereof, the undersigned has executed and delivered this Guaranty as of the date
first above written.

GUARANTOR:

	 	 	 	 	 
	 	 	 
	 	
/s/ Stephen C. Kircher	 
	 	Stephen C. Kircher, an individual

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